ADMINISTRATIVE PROCEDURE

Signature: ___________________

State Board

Rule: _______________________________________________________________________

Purpose:

To provide guidance on the proper use of the Leon County School Board’s (LCSB) purchasing card as an efficient and cost effective method of purchasing and paying for goods and services not exceeding $750 per purchase.

1. Background

The Leon County School Board is making available to certain District employees delegated authority to make minor purchases directly through a “purchasing card” system. This will allow schools/departments flexibility to purchase small routine materials and supplies.

Certain controls have been developed for the purchasing card that do not exist in a traditional credit card. These controls ensure that the card is used only for specific purchases and within specific dollar limits. Also, certification by each cardholder is required for all purchases as well as authorization from the principal/site administrator.

2. Card Description

The purchasing card shall contain the District’s name (Leon County School Board), the cardholder’s name, the cost center number, an account number, tax exemption number and an expiration date. It has been uniquely designed to avoid confusion with personal credit cards.

3. Purchasing Card Assignment

The Principal/Cost Center Administrator approving the assignment of a purchasing card will set two limits for each cardholder: single purchase limit and billing cycle limit. The maximum limits shall be $750 for a single purchase and specified limits during the billing cycle. A list of personnel approved for a higher limit will be maintained by the Purchasing Director.

4. Purchasing Card Limits

A purchase may be made of multiple items, but the invoice cannot exceed $750 or the cardholder's limit if less than $750. Purchases over $750 must be made by purchase order under the District’s purchasing policies and procedures with the exception of purchases made through the Purchasing or Finance departments. Charges for purchases shall not be split to stay within the single purchase limit. Splitting charges will be considered abuse of the Purchasing Card Program.

5. Definitions

A. A Principal/Cost Center Administrator authorizes the issuance of a purchasing card to an employee.

B. The purchasing card administrator coordinates issuance of a purchasing card to an employee.

C. A cardholder presents goods or services for purchase to a vendor who accepts Visa.

D. The vendor processes the card information to obtain authorization for the purchase.

E. The bank receives the transaction information electronically from Visa.

F. The bank verifies the account number and spending control limits on the card.

G. The cardholder receives the merchandise and a copy of the receipt.

H. The cardholder maintains the original receipt for monthly remittance to the account clerk.

I. The vendor receives payment for the merchandise within 3 days.

J. The account clerk receives a monthly memo statement for distribution to each cardholder.

K. The cardholder reconciles all purchases and credit activity to the memo statement and forwards it to the account clerk.

L. Finance receives a monthly consolidated statement for the District.

M. The account clerk forwards the reconciled memo statements, along with supporting documentation, to Finance within 10 business days from the billing date.

N. Finance pays the consolidated statement to the bank.

1) Holding and securing the purchasing card and card number;

2) Buying supplies and services;

3) Informing vendor of tax exempt status prior to processing sale transaction;

4) Collecting and saving sales receipts;

5) When the description of the item(s) purchased is not clear on the receipt, the cardholder must provide that description on the back of the receipt or on the optional transaction log.

6) Receiving and inspecting all ordered materials and services;

7) Reporting discrepancies to vendor;

8) Matching receipts with the monthly statement;

9) Identifying and handling disputed charges;

10) Signing the monthly statement;

11) Reviewing/verifying charges with the account clerk;

12) Submitting statements and receipts to the account clerk by department deadline;

13) Complying with District policy and procedures.

B. Account Clerk is responsible for the following:

1) Reviewing the monthly cardholder statement with cardholder;

2) Assisting in the handling of disputed items;

3) Verifying/assigning account codes;

4) Signing the Payment Request Form or monthly statement (ensuring sufficient budget dollars are available) and forwarding it along with the receipts, packing slips and other supporting documentation as required, to Finance within 10 business days from the end of the billing cycle.

C. Principal/Cost Center Administrator is responsible for the following:

1) Designating the account clerk and communicating same to the purchasing card administrator;

2) Requesting purchasing cards and establishing pre-set limits;

3) Evaluating the need to cancel or reissue cards;

4) Collecting revoked cards from cardholders and remitting them to the purchasing card administrator.

D. Purchasing Card Administrator (PCA) is responsible for the following:

1) Reviewing and communicating to the bank all purchasing card requests and changes to card limits;

2) Training cardholders;

3) Coordinating the issuance and cancellation of cards;

4) Maintaining program policy and procedures, cardholder guides and/or manuals and all Cardholder Application Forms;

5) Maintaining a list of all current account clerks;

6) Pursuing supplier discount opportunities;

7) Evaluating purchasing card feedback from suppliers;

8) Coordinating and maintaining internal controls;

9) Coordinating program policy issues;

10) Participating in ongoing program reviews;

11) Participating in resolving billing disputes;

12) Monitoring program for compliance with all school district policy and procedures and recommending disciplinary action to principals/cost center administrators;

(13) Monitoring the program’s aggregate monthly spending relative to the aggregate established credit limit with the bank for potential required increases.

A. The cardholder may pick up supplies or services, or place an order for these by telephone, facsimile or electronically. Internet purchases must be made over a secured transmission. The supplies or services must be immediately available for pick up, shipped or delivered within the monthly billing cycle. The order should not be placed without this assurance. No back-ordering is allowed when using the purchasing card.

B. Telephone Orders: The cardholder must confirm that the vendor will charge the purchasing card when shipment is made so that receipt of the supplies may be certified on the monthly statement. This is also a requirement of the vendor's contract with Visa.

C. Card Limits: The purchasing card is to be used for District authorized purchases only. The purchasing card cannot be used for any personal use. The cardholder is the only person authorized to use their assigned Purchasing Visa Card.

D. Gift Cards: Gift cards may be purchased utilizing fund sources that allow such purchases (i.e. A+ funds, School Improvement Plan (SIP) funds or grant funds). Gift cards cannot be purchased in denominations over $50.00. A record of all Gift card purchases must be maintained denoting when, where and to whom the Gift card was given.

E. Prohibited Purchases: The following supplies and services shall not be purchased with the purchasing card:

Personal Items

Cash Advances

Gas and Oil Products

Travel (Hotels, Motels, Auto Rental, Airfare)

Meals or Entertainment

Building Repairs

Telephone Calls (with the exception of district-wide charges paid by Finance or Purchasing)

Capital Equipment (with the exception of Information Technology (IT) paid by a district-wide Purchasing Card Account)

Medical Services

Legal Services

Cellular Phones and Beepers (service and equipment)(with the exception of District-wide charges paid by Finance or Purchasing)

Gifts (with the exception of Gift Cards)

Annual Contracts

Internal Account Purchases

Any other restrictions that may be placed by the Principal/Cost Center Administrator

F. Dollar Limits: A purchase may be made up of multiple items, but the total invoice (including shipping) cannot exceed the lesser of $750 or the cardholder’s single purchase limit. All purchases over $750 must be made by purchase order under the District's purchasing policies and procedures with the exception of purchases made by the Purchasing and Finance departments. Charges for purchases shall not be split to stay within the single purchase limit. Splitting charges will be considered abuse of the Purchasing Card Program.

G. Sales & Use Tax: The District is exempt from paying any State of Florida sales and/or use tax, even if the purchase is made with the Purchasing Card. The District’s sales tax exemption number is printed on the face of the purchasing card. It is the responsibility of the cardholder to make the vendor aware that the sales transaction will be tax exempt prior to processing the sale.

If the vendor charges sales tax, the cardholder must contact the vendor and obtain a credit equal to the amount of the sales tax. Do not permit the vendor to issue cash to settle a sales tax error. If you have a problem with any vendor about sales or any other tax, please contact the Purchasing Card Administrator.

H. Documentation: For all transactions, the cardholder must retain the original customer's copy of the summary charge slip, along with the detail receipt (if receipt does not include description, then cardholder must add one on back of receipt), which identifies every item purchased and the corresponding item cost. For telephone orders, the cardholder must retain the receipt and/or packing slip.

I. Missing Documentation: Where supporting documentation is missing, the cardholder must contact the vendor and request a duplicate receipt. If the cardholder is still unable to obtain documentation they must contact the Purchasing Director. Failure to provide adequate documentation will result in disciplinary action and employees may be required to make payment for such transaction.

J. Denied Purchase: The cardholder may report a denied point of sale or other rejected purchases to the account clerk. The account clerk should advise the Purchasing Card Administrator of any known denied cardholder purchase. Information to be provided includes cardholder name and account number, vendor and date of declined sale. The Purchasing Card Administrator shall inquire into the denied sale, take appropriate action and report back to the account clerk.

If a vendor refuses to accept a purchasing card, the cardholder should report this fact to the account clerk, who will forward this information to the Purchasing Card Administrator. District purchasing procedures apply to the Purchasing Card as well. If you have any questions, please contact Purchasing or Finance prior to purchase.

K. Funding: All cardholders must follow the school/department’s administrative funding procedures to ensure that sufficient funds are available prior to making a purchase.

When purchases are being made from “Federal Funds” or other special approved funds, it is the cardholders responsibility to know whether the purchase fits the guidelines of the Federal grant or authorized fund source. It is also imperative that the cardholder be fully aware of any and all deadlines associated with the Federal grant providing the funds. No purchases are to be made with a purchasing card, using Federal grant funds, after the last date to encumber as outlined by Finance when the project is first set up. If a cardholder makes a purchase from Federal dollars that is not appropriate for that grant, or if the purchase is made after spending deadlines have passed, an alternate source of funds will have to be identified by that cardholders administrator.

Use of the purchasing card does not relieve an employee from complying with federal, state, local laws, ordinances, regulations, or School Board policies and procedures.

If the Principal/Cost Center Administrator questions a purchase made by a cardholder, the cardholder must substantiate necessity or official use. Misuse of the Purchasing Card shall be subject to the immediate revocation of Purchasing Card privileges. Resolution of situations involving improper use of the Purchasing Card will be handled by the appropriate authority in accordance with District policies and procedures, and reported to the Purchasing Director.

Questions: Questions regarding Purchasing Card procedures should be directed to Purchasing or Finance.

11. Reconciling Monthly Statements

A. The bank will provide the cardholders with monthly memo statements for verification of charges and reconcilement. A copy of these statements will be sent to the account clerks approximately 6-8 days after the end of each billing cycle.

B. The cardholder must verify receipt of goods or services for all purchase transactions on the monthly memo statement and match each one to corresponding supporting documentation (such as invoices, charge slips, receipts and packing slips). The cardholder must also verify all credit transactions were processed to the statement. The cardholder must sign either their Visa Statement or the Payment request Form (Journal entry form).

Upon fully reconciling the monthly statement, the cardholder submits the statement and all documentation to the account clerk.

C. The account clerk must review the cardholder's monthly statement, verify the purchases were for a proper public purpose and verify/assign the account codes. The Cost Center Supervisor or designee must sign the statement or Payment Request form signifying approval of the purchase(s).

A. The cardholder must attempt to resolve problems directly with the vendor. The vendor must issue a credit for billing errors, sales tax, defective supplies or unacceptable services, returned supplies or canceled orders. This credit should appear on the cardholder's statement within 60 days. Do not permit the vendor to issue cash to settle a disputed amount. Under no circumstances can the employee accept cash.

B. If the cardholder is unable to resolve the issue with the vendor, or cardholder's credit does not appear on the monthly statement within 60 days, cardholder (with assistance from the account clerk) should contact the bank's Commercial Card Customer Service Group at 1-877-826-0933 to resolve the matter. This group will require the cardholder to fax an Account Holder Dispute Form (which is provided on the back of the monthly statement). A copy of the dispute form must also be sent to the Purchasing Card Administrator.

C. When an account is in a dispute status, the disputed amount is still included in calculating the available money for authorizations (monthly limit). However, disputed items are removed from all late charges, past due amounts and calculations. Any cardholder statements generated while the account is in dispute will display the following message:

YOUR ACCOUNT IS IN DISPUTE FOR $xxx.xx. THIS AMOUNT HAS NOT BEEN INCLUDED IN THE PAYMENT CALCULATIONS.

D. After the item has been entered as a dispute, the bank must determine who is responsible by researching the transaction including requesting a copy of the sales draft when necessary.

E. If the problem is resolved between the merchant and the cardholder while the item is in dispute, the cardholder should write the solution agreed upon on the bottom of the Dispute Form that was previously faxed to the bank, and fax it to the bank as soon as possible.

F. If it is ultimately determined that the cardholder is actually responsible for the transaction, then the questioned amount will be added to the next monthly statement. If the cardholder is not responsible for the transaction, the dispute is settled for the cardholder and the charge-back process will be initiated against the merchant by the bank.

G. If there continues to be problems with a particular merchant, the cardholder should notify the Purchasing Card Administrator of the problems.

14. Reporting a Lost or Stolen Purchasing Card

If a card is lost or stolen, the cardholder must immediately notify the bank’s customer service (at 1-877-826-0933) and the Purchasing Card Administrator. Access to the card will be immediately blocked, and the cardholder shall not be responsible for any charges after the card is reported lost or stolen. The cardholder must provide the bank with the Purchasing Card's 16-digit account number. The bank will also require the cardholder to submit written confirmation by fax or by mail of the card cancellation request reported verbally. A replacement card will be issued by the bank and delivered to the Purchasing Card Administrator.

15. Purchasing Card Termination

A. Terminated Employees: The Principal/Cost Center Administrator will immediately notify the Purchasing Card Administrator and account clerk of terminated employees. The Purchasing Card Administrator is required to notify the bank to cancel the card of a terminated employee within 24 hours of such termination.

During the exit interview, the Principal/Cost Center Administrator will obtain the Purchasing Card from the terminated employee. The Principal/Cost Center Administrator must notify the Purchasing Card Administrator when Purchasing Cards belonging to terminated employees are not returned.

The Principal/Cost Center Administrator must destroy returned Purchasing Cards by cutting the cards in two and must deliver them to the Purchasing Card Administrator. The Purchasing Card Administrator will dispose of the destroyed cards.

B. Revocation of Card: Purchasing Card privileges may be revoked upon the cardholder's failure to follow District policies and procedures. The Principal/Cost Center Administrator, the Purchasing Card Administrator and the account clerk will coordinate the revocation of Purchasing Cards. The Purchasing Card Administrator will immediately notify the bank to cancel any such cards.

The Principal/Cost Center Administrator will obtain the revoked Purchasing Card from the employee.

The Principal/Cost Center Administrator must destroy the returned Purchasing Card by cutting it in two and must deliver it to the Purchasing Card Administrator. The Purchasing Card Administrator will dispose of the destroyed cards.

16. Violations

A. The following actions are prohibited:

Purchases of items specifically prohibited by policy;

Purchases that exceed the Purchasing Card limits;

Not reporting lost or stolen cards;

Purchases from vendors that create a conflict of interest, (i.e., purchases from companies owned or operated by District employee(s) and/or their relatives, etc.);

Inadequate record keeping and/or documentation of purchases;

Acceptance of cash in lieu of a credit to the statement;

Splitting of purchases within the single purchase limit;

Making a purchase using Federal dollars after the Federal grant encumbrance period.

Using the Purchasing Card for Internal Account transactions

Written notification of any violation of the above listed prohibitive purchases must be submitted to the Purchasing Card Administrator from the Cardholder or Account clerk within 7 days of occurrence or receipt of the monthly statement, whichever occurs soonest.