COO Approved Purchase Card Guide 042309

8/8/2019 COO Approved Purchase Card Guide 042309

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APRIL 2009

Montgomery County Public SchoolsDepartment of Materials Management

Division of Procurement

850 Hungerford Drive, Suite 162

Rockville, MD 20850

301-279-3555


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Executive Summary

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Purpose

The MCPS Purchasing Card Program has been established to streamline the process formaking low-dollar purchases that are necessary for MCPS operations. It is the preferredmethod of procurement for all small purchases not on a bid list and less than $50 (also

referred to as micro purchases). Principals are authorized to use the purchasing card(only IAF) for clothing or assistance for needy students, as outlined in the IAF Manual.These disbursements will require written authorization from the Office of SchoolPerformance.

Use of the purchasing card does not relieve the card member from complying with theMCPS Procurement Manual, IAF Manual, and all MCPS regulations, especially therequirements in MCPS Regulation DJA-RA,Procurement of Equipment, Supplies, andContractual Services.

Examples of permitted items include the following:

Approved materials of instruction Books, periodicals, and newspapers Art supplies, glue sticks, and crayons Grocery items within documented limitations Sheet music Office supplies Computer cables and flash drives
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Audio/visual aids for students Stationery, such as specialized paper and pens and pencils School supplies, such as dry erase markers, paper towels, facial tissues, and band aids Clothing for needy students within documented limitations Storage containers for classrooms Approved software Landscaping items, such as bulbs, small trees, and supplies

Exclusions

The materials and services listed below shall be excluded from the Purchasing Card Program.

a) Transactions greater than standard dollar limits.b) Travel and entertainment expenses, including, restaurants, common carriers, and

accommodations.c) Furniture.d) Gas and oil, including car rental.e) Disbursements that are primarily for the benefit of school staff members or other MCPS

employees, such as gifts, meals, retirement functions, or other staff social activities.f) Transactions resulting in insufficient funds.g) Cash access and gift cards.h) Amusement and entertainment (e.g., movie theaters, bowling alleys, video game

clubs, and recreation services).i) Any disbursement that is prohibited by federal, state, or county law, or by MCPS

policy or regulation.

Any questions regarding exclusions should be directed to your supervisor for

clarification. Those card members that have been given authorization to use thepurchasing card for travel and restaurants will be given additional instructions underseparate cover, including the requirement to sign a different purchasing card agreement(included at the end of this guide). In all instances, current MCPS travel andprocurement policies and regulations must be followed.

Definitions

Approving OfficialThe approving official for school-based personnel is the principal. For central office, theapproving official is a director or coordinator. This is the person in authority who will be

responsible for card activities of subordinate card members.

Card MemberThe card member is the employee to whom the card is issued. The card bears theemployees name and may only be used by that employee to make authorized purchasesfor MCPS. Card members are reminded to safeguard their cards with appropriatesecurity measures in accordance with good business practices.


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Program AdministratorThe program administrator (director, Division of Procurement) serves as the liaison forthe school system with the card member and is the contract administrator. This involvesquality control and testing, specific contract delivery requirements, special contractprovisions, and MCPS procedures for monitoring and measuring performance. He/she

will set the spending amount per transaction, billing cycle, and month that will limit cardmember transactions to a predetermined dollar amount within any defined period. Inaddition, the Division of Procurement will set up and define Merchant Category Codes(MCC). The MCC is a 4-digit code assigned by the suppliers credit card processoraccording to category or type of business a merchant conducts from which MCPS staffmay purchase.

Program Card AdministratorThe program card administrator (controller, Division of Controller) serves as back-up tothe program administrator in contract administration. He/she serves as point-of-contactfor the Purchasing Card Programs initial account set-up and ongoing account

management. Account management includes processing of spending limits or transactionincreases (permanent and temporary), issuance of new cards, reporting of stolen or lostcards, and answering general questions as needed.

Purchasing Card Provider(currently American Express)

Purchasing cards benefit MCPS by expediting payment and reducing paperworkassociated with purchase orders and invoices for small dollar transactions. The providersupplies MCPS with detailed reports and allows staff to acquire small dollar goodswithout subjecting vendors to payment delays.

2.0 Roles and Responsibilities

The Card Member

a) Acknowledges that the purchasing card is the property of MCPS and shouldonly be used for official business purposes.

b) Accepts responsibilities under the MCPS Purchasing Card Program andagrees to comply with the requirements set forth in this Users Guide and allMCPS policies and regulations by signing the MCPS Purchasing CardAgreement.

c) Does not give the card number to any other individual, even to place orderswith a supplier. The purchasing card is a charge card and must be used insuch a manner that ensures its security and safekeeping. The purchasingcard is non-transferable. Allowing anyone else to use the card will result intermination of card privileges. The card member must be the person placingthe order with the supplier.


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d) Notifies card provider immediately of a lost or stolen purchasing card andadvises his/her approving official and the program card administrator.Notification is required to release MCPS from liability for charges incurredby someone other than the card member.

e)

Advises the supplier at the time of transaction of the following:1. The shipping address, including the name and phone number, of theperson to whom the material is to be delivered.

2. The MCPS school, office, division, or department that is placing theorder at the time of purchase or requisition.

3. The tax-exempt status of MCPS (i.e., no sales tax). The tax exemptionnumber is listed on the card.

f) Obtains a receipt and/or a packing list at the point of receiving purchasesand verifies that the materials and/or services received are in the quantityordered, in good condition, and the correct items ordered.

g) Treats returns and credits of goods as separate transactions. They are not tobe handled as exchanges or combined with other purchases, and the accountholder may not accept cash refunds.

h) Reviews statements each month for accuracy and gives statements with logsand invoices/receipts to the approving official to be retained by theapproving official for future reference and audit. (Click here to review,MCPS Form 234-21, Purchasing Card: Card Member Transaction Log.)

1. Notifies a card provider customer service representative of any billingdiscrepancies posted on the Monthly Reconciliation Statement that cannotbe resolved with the supplier. The card provider will place these charges indispute until they are resolved.

j) Contacts the program administrator (or program card administrator) forassistance in informing suppliers who are not currently purchasing cardsuppliers of the advantage of accepting the purchasing card from MCPS.MCPS Division of Procurement [email protected].

Approving Official (Principals, Directors, Coordinators)

a) In collaboration with the program administrator, establishes appropriateguidelines and procedures for use of the purchasing card at the school and/oroffice level consistent with the requirements set forth in this guide andMCPS policies and procedures, including setting transaction and monthlylimits for each subordinate card member.

b) Reviews and signs the monthly summary report within 14 calendar days ofreceipt. Signature indicates that the approving official has reviewed allmonthly transactions to ensure purchases are made in accordance withMCPS policies and regulations.

c) Approves and retains all documentation, including card members monthlystatements and transaction logs, for a period of five fiscal years for futurereference and audit.
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d) Ensures subject records are complete and turns over all records to successorprincipal, director, or coordinator upon reassignment or retirement.

Program Administrator and Program Card Administrator

a)

Develops and coordinates training for card members and approving officialsand provides updates to card members.b) Works with card members to identify new suppliers/merchants.c) In collaboration with approving officials, establishes and maintains card

member records and controls regarding transaction limits, monthly limits,reporting hierarchy, and card expiration date.

d) Coordinates card member enrollment, termination, and changes. (Click hereto review MCPS Form 234-20, Purchasing Card File MaintenanceWorksheet).

e) Identifies program improvements and enhancements for new purchaseagreements. This may include negotiation of discounts on future purchasing

card purchases.f) Serves as point-of-contact for card provider for account set-up and ongoingaccount management services.

Division of ControllerInvoice Processing and Remittance

a) Receives and processes monthly purchasing card billing statement to theMCPS accounting system for payment and input.

b) Performs post-audits of purchasing card transaction activity to ensure properfunctioning of the program.

c) Executes payment of the card provider's monthly billing statement. Thepurchasing card billing system is a single bill/central pay arrangement.Although each individual card member receives a monthly account statement,payment is centrally executed by MCPS. The grand total of all charges toMCPS, with supporting detail by card member account, is paid to cardprovider within 14 days following the close of the billing cycle.

d) Retains monthly billing statements for five years, as outlined in staterecords.

e) Invoices schools for reimbursement of IAF purchasing card expenditures.Payment is normally expected within 30 days of the invoice.

Merchants/Suppliers

a) Marks boxes and other shipping containers with the proper shipping addressand the card members name and telephone number to facilitate identification.

b) Shows detailed information on quantity, description, and price on receipts orpacking lists.

c) Issues paid invoices (as requested by MCPS Department of Transportationand Division of Maintenance for their special procedures).

d) Segregates individual credit/return transactions. Does not issue cash refunds.
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e) Maintains the confidentiality of MCPS purchasing card account numbersand transaction history to prevent this information from unauthorized use.

f) Bills or invoices backorders after shipping.g) Provides adequate credit card security on suppliers web page.

Purchasing Card Provider (currently American Express)

a) Processes requests for new purchasing card accounts, changes, orcancellations of accounts in a timely manner.

b) Sends monthly purchasing card account statements directly to the school,office, department, or division of individual card members.

c) Resolves billing errors with card members and/or suppliers in a timely manner.d) Provides a single monthly billing statement to the MCPS Division of

Controller, including all information necessary to apply transaction costs tothe MCPS general ledger code assigned to each purchasing card account.

e) Provides ongoing customer service through MCPS representatives and

program administrator.

3.0 Procedures

Ordering Materials or Services

a) The card member (or his/her approving official) must ensure that funds areavailable to pay for items being purchased. This includes items purchasedwith a card from IAF.

b) Transactions should not be split in order to exceed single or monthlypurchase limits.

c) All items purchased over the counter must be immediately available. Noback ordering is allowed.

d) All items purchased by telephone should be delivered in a single delivery bythe merchant (supplier) within the 30-day billing cycle. The order shouldnot be placed without this assurance.

e) Whether by phone or over the counter, the card member shall inform thesupplier that the purchase is for MCPS and is tax exempt. The tax exemptnumber is on the card and should be shared with the supplier. The cardmember will secure a refund from the supplier or reimburse MCPS for anysales tax included in the account.

f) Card members shall not be charged for supplies/services until shipped (inthe month for which the supplies/services were ordered).

g) The card member must stipulate that the following is prominently markedon the outside of all boxes or other shipping containersshipping address(including the name and phone number of the person to whom the materialis to be delivered) and the school, office, department, or division for whichthe order had been placed.


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h) If someone other than the card member is picking up the order, the cardmember must notify the supplier of the name of this individual and requestthat the supplier ask for identification. That person signs for the order beingpicked up.

i) The card member transaction logand the monthly statement shall be used todocument purchasing card orders. These logs, with receipts attached, shallbe retained by his/her approving official for at least five fiscal years. Theselogs are subject to review by both internal and external auditors.(Click hereto review MCPS Form 234-21, Purchasing Card: Card MemberTransaction Log.)

Returns/Credits

a) The card member is responsible for ensuring that returns of materials tosuppliers are handled as credits and treated as separate transactions. Returnsare not to be handled as exchanges or combined with other purchases. A

separate transaction must be placed to reorder the correct materials.b) Cash refunds are not allowed under any circumstances.Picking Up/Receiving Materials

a) Employees who have been authorized by their supervisors to pick upsupplies ordered by a card member must show identification of employmentby MCPS when picking up orders from a vendor. The official MCPSemployment badge is the required identification.

b) The card member verifies that the material received is what was ordered andverifies the accuracy of all receipts and packing lists.

c) The card member updates his/her transaction log indicating delivery/receiptof materials ordered.

d) Purchase card transactions are exempt from taxes. MCPS Federal TaxIdentification number is 52-6000989, and exemption is listed on all cards.

Monthly Card Member Statements and Reconciliation

a) The card provider will send monthly account statements directly to theschool/office/department/division of individual card members.

b) Principals will forward a copy of the log with invoice copies to his/hercommunity superintendent for review and signature. To the greatest extentpossible, electronic signatures and electronic logs will be used to reducepaperwork and to expedite processing of charges and monthly statements.Original logs with original invoices will be retained on site for auditpurposes. Only the principals log is to be forwarded to the communitysuperintendent.
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c) Each card member is responsible for checking his/her monthly statement ofpurchases or other transactions (e.g., credits). The transaction log (withattached sales receipts) maintained during the month should be comparedwith the monthly statement from the card provider. Part numbers or termssuch as miscellaneous, supplies, office supplies, classroom materials,

general merchandise, or hardware items are not sufficient. The Division ofMaintenance will use a modified method that will be approved in writing bythe chief operating officer.

d) If for some reason the card member does not have documentation of thetransaction to send with the statement, the card member must make a goodfaith effort to obtain the required documentation from the merchant. If suchattempts are unsuccessful, the card member must attach an explanation thatincludes a description of the item, date of purchase, merchants name, andwhy there is no supporting documentation.

e) The card member should attempt to resolve any disputed transactionsthrough the supplier. If a discrepancy cannot be resolved with the supplier,

the card provider should be notified. The card provider (American Express)will place these charges in dispute until resolved.f) After review, the card member signs and dates the monthly card member

statement, with transaction log and receipts, and gives it to his/her approvingofficial within 7 calendar days for retention and audit. The use of a signaturestamp is not acceptable by either the card member or approving official. Theapproving official must review the monthly report within 14 calendar days,including disputed transactions. These timelines must be followed.

g) Below is a graphic representation of the process.


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MCPS American Express Purchase Card Process

Amex

MCPSEndUser

AccountsPayable

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t

Yes

Approved?

Signsstatement

and sends to

AP Office

Act on resolving

authorizationdispute with

supplier & end

user

Reviews

monthlystatement for

all sites

Validates

and

authorizescharge

Receives andpays American

Express

Invoiceaccording to

statement and

accountable

documents

Receivesindividual

monthly

statement

Issues

monthly

statement

for all MCPSsites

Receives

statement and

accountabledocuments

Place order

using P-cardwith supplier

Payment is

received by

supplier andPO is

fulfilled

Reviews

monthlystatement and

attaches

accountable

documents

Reviewsmonthly

statementfor all sites

Inform

Procurementof rejection


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Lost and/or Stolen Card

a) The card member reports the loss/theft of his/her card (or account number)immediately to the card providers Customer Service at 1-800-492-4920.

b) After the card provider has been contacted, the card member must advisehis/her approving official and the program administrator. Upon notificationto the card provider of a lost or stolen card, further use of the card will beblocked. Prompt notification of lost or stolen cards (or accountconfidentiality) reduces MCPS liability for fraudulent charges.

Issuing a New Card Member Account

a) The approving official completes the card member application and forwardsit to the program administrator to be submitted to the card provider. (Clickhere to review MCPS Form 234-22, Purchasing Card: Approving OfficialAcknowledgement).

b)

The program administrator contacts the potential card member to schedule themandatory training session. Cards will be issued at the training session.c) The program administrator completes applicable sections of the MCPS

Purchasing Card Agreement and obtains the signature of the approvingofficial for the card members participation in the Purchasing Card Program.

d) The card member attends the mandatory training, reads the User Guide, andis expected to understand his/her responsibilities with regard to thepurchasing card, including the transaction and monthly limits set by his/herapproving official.

e) The card member signs theMCPS Purchasing Card Agreementand gives it tothe program administrator (or his/her representative) at training in order toreceive the MCPS purchasing card.

Cancellations

a) The card members approving official must initiate cancellation of the cardmembers account within 48 hours in the event the card member istransferred to another location or his/her employment is terminated. Thepurchasing card accounts cannot be reassigned from one employee toanother. It is a misdemeanor in Maryland, subject to fines and jail time, tomake purchases under $500 with an unauthorized credit card. Makingcharges in excess of $500 with an unauthorized credit card is a felony andsubject to longer jail time and larger fines.

b) In the event that the card members employment is terminated, theapproving official should expedite cancellation of the card membersaccount by contacting the program administrator immediately.

c) The approving official must collect the card, cut it in half, and retain thepieces with the financial records when the card member leaves the location.If the plastic card cannot be collected, the approving official must advise theprogram administrator immediately.
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d) The approving official must provide the program administrator with therelevant details of the card member's cancellation.

e) The program administrator coordinates cancellation of the card membersaccount with the card provider.

f) The approving official initiates permanent or temporary changes in transactionor monthly limits to a card members account. Upon notification by theapproving official to the program administrator, the program administrator willcomplete the necessary form and submit to the card provider.

g) Changes to a card members account are normally effective within 48 hours.h) In emergencies only, the card provider can facilitate change approval

immediately upon notification by the program administrator. In such cases,the change must immediately be followed by appropriate approval by thecard members approving official.

Year-End Procedures

a)

All card members shall follow year-end instructions provided by their approvingofficials regarding spending limitations as the fiscal year comes to a close.Information provided by the Division of Controller to approving officials willinclude the deadline by which fiscal year-end spending must be completed.

b) All card memberswho areten-month employees must turn in their purchasingcards no later than the same time they relinquish keys and other schoolproperty as the school year closes. However, cards may be requested fromcard members earlier at the discretion of the approving officials as spendinglimits on cards are reduced to coincide with the end of the fiscal year.

Monitoring and Auditing Purchasing Card Activities

a) The Division of Procurement and the Division of Controller, as well as theInternal Audit Unit in the Office of Shared Accountability, will conductmonthly and random audits of purchasing card use. The primary purpose ofthese audit reviews is to ensure that the Purchasing Card Programprocedures are being followed and that

1. purchase volume is reasonable,2. transactions are appropriate,3. purchases are properly authorized,4. split purchases are not being made to circumvent card limits, and5. documentation is complete.

b) Approving officials are responsible for retaining all receipts and vouchersfor audit by internal and external auditors.

c) In addition to random audits, monitoring of purchasing card use will bemade by the program administrator and the program card administratorthrough the use of card provider tools, including online reporting andprogram management. Purchasing card activity through card provider toolsalso shall be monitored by location by approving officials or their designees.Areas to be monitored include, but are not limited to, the following:


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1. Compliance with individual location procurement and purchasingpolicies.

2. Compliance with purchasing card procedures.3. Inappropriate charges of sales and use tax.4.

Inactivity indicates that the need for the card has ended.

d) In general, purchasing card transactions are subject to review by either orboth of the following:

1. Approving official for the activity of the card member2. Office of Chief Operating Officer

e) If any card is used for an improper purchase, reimbursement will be made tothe Division of Controller. The statement should be annotated to indicatethat an improper purchase was made, identifying the transaction that was

improper. A copy of the annotated statement and a cashiers check ormoney order made out to MCPS should be sent via the Pony to

Division of ControllerMontgomery County Public SchoolsCESC, Room 156Rockville, Maryland 20850

4.0 Telephone and Contact List

Call the card provider (currently American Express) 24 hours/day,

7 days/week, at 1-800-492-4920. Important reasons to call are Lost or stolen cards Rejected cards Questions or information Billing disputes

If disputes cannot be satisfied with the supplier, the card provider should be contactedand the program administrator informed of the dispute. Please remember that the suppliershould be contacted first to resolve billing disputes.

MCPS Program Administrator301-279-3115 and 301-279-3555

Important reasons to call Card member is changing work locations Employment with MCPS is terminated Purchasing card use is denied by supplier Supplier does not accept American Express Other questions


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PURCHASING CARD AGREEMENT

The Montgomery County Public Schools (MCPS) purchasing card (card) is issued to you subject to thefollowing terms and conditions. You must comply with these terms and conditions as a requirement foryour employment.

I certify that:

1. I am entrusted with a valuable tool, a purchasing card, and will be making financial commitments onbehalf of Montgomery County Public Schools (MCPS). I understand that MCPS is liable to the cardprovider 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 inaccordance with my organizational responsibilities and purchase limits established by the approvingofficial designated to review my purchases.

3. I will use this card for approved purchases only and must not charge personal items. I am aware ofand understand Board of Education Ethics Policy. MCPS will audit the use of this card and reportand take appropriate action on any discrepancies. I understand that use of the card for personal itemswill result in deduction of the total of such unauthorized charges from my payroll check.

4. I will follow the policies and regulations established by MCPS for the use of the card. Failure to doso may result in either revocation of the 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 procedures. I understand that personsintentionally making unauthorized purchases may have their card privileges suspended or be subjectto disciplinary and/or legal action.

6. I have been given a copy of the User Guide for the card. I have read the User Guide and understandthe requirements of the cards use.

7. If the card is lost or stolen, I will notify the card provider and the MCPS program administratorimmediately. Having done so, if my card or account number is lost or stolen, I will not be personallyresponsible for any unauthorized charges.

8. I agree to comply with any changes MCPS may make to the terms and conditions and policies andprocedures concerning the use of the card.

9. I will return the card immediately upon request or upon termination of my employment (includingretirement). 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 AmericanExpress (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. Icertify 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, regulations, and all other applicablelaws. This agreement supersedes any previously signed agreements (as of the date of the signing of thisagreement).

Employee Name (printed): _______________________________________________________

Employee ID #: ________________________________________________________________

School/Location Name: __________________________________________________________

Employee Signature: _________________________________ Date: _____________________


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Purchasing Card Agreement

Board of Education Member and Executive Staff Member

The Montgomery County Public Schools (MCPS) Purchasing Card (card) is issued to you subject to the termsand conditions listed below. You must comply with these terms and conditions.

Please certify that:1. 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 the cardprovider 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 inaccordance with my organizational responsibilities and purchase limits established by the approvingofficial designated to review my purchases.

3. I will use this card for approved purchases only and must not charge personal items. I am aware ofand understand Board of Education Ethics Policy. I understand that MCPS will audit the use of thiscard and report and take appropriate action on any discrepancies. I understand that use of the card forpersonal items will result in deduction of the total of such unauthorized charges from my payrollcheck.

4. I will follow the policies and regulations established by MCPS for the use of the card. Failure to doso may result in revocation of my card use privileges or other disciplinary actions.

5. I acknowledge that all purchases must be made in accordance with applicable laws and regulations,including but not limited to MCPS Purchasing Card procedures. I understand that personsintentionally making unauthorized purchases may have their card privileges suspended or be subjectto disciplinary and/or legal action.

6. I have been given a copy of the User Guide for the card. I have read the User Guide and understandthe requirements of the cards use.

7. If the card is lost or stolen, I will notify the card provider and the MCPS program administratorimmediately. Having done so, if my card or account number is lost or stolen, I will not be personallyresponsible for any unauthorized charges.

8. I agree to comply with any changes 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 term of office or

employment. 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 cardprovider (see User Guide) immediately.

10. I will follow MCPS policy and regulation authorization of travel and dining expenses and promptlysubmit required documentation regarding business purpose and participants.

11. I have attended the MCPS Purchasing Card training and agree to additional training as needed.

As the individual being issued the card, I have read and agree to the terms and conditions stated above. Icertify 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, regulations, and all other applicable

laws. This agreement supersedes any previously signed agreements (as of the date of the signing of thisagreement).

Employee Name (printed): ______________________________________________________

Employee ID #: _______________________________________________________________

School/Location Name: ________________________________________________________

Signature: __________________________________________Date:_____________________

COO Approved Purchase Card Guide 042309

Documents

Transcript of COO Approved Purchase Card Guide 042309