Purchasing Card Reviewer Training

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Purchasing Card Reviewer Training
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We will cover

• Cardholder Responsibilities
• Restrictions
• Purchases Requiring Approval
• Changes to Cardholder Information
• Reviewers Responsibilities
• Establishing the Review Process
• Leaving the Department
• Location of Forms
• Purchasing Card Fraud
• Contact Information

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Cardholders Responsibilities
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Cardholders Responsibilities

• Making only authorized purchases
• Obtaining a detailed receipt for each purchase
• Completing the transaction log with a brief
  description justifying the purchase
• Reconciling the monthly Visa statement
• Resolving any discrepancies

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Cardholders Responsibilities (cont)

• Ensuring credits are received
• Documenting furniture and food purchases as
  required
• Signing the log
• Passing the paperwork to assigned Reviewer for
  approval in a timely manner
• Note Reallocation of charges may be the
  responsibility of the cardholder, but this
  decision is made at the department level.

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Reconcile Monthly VISA Statement

• Compare VISA statement to transaction log and
  resolve any discrepancies in a timely manner
• Keep all receipts and related paperwork (VISA
  statement, signed transaction log) together
• Forward entire package to reviewer within 3 days
  of completion

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• Restrictions

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Restrictions at Point of Sale

• These transactions will be declined by the bank
• Purchases exceeding the single purchase limit or
  monthly credit limit
• Cash advances
• Restrictions by merchant category
• Travel (Hotels, Airfare, Car Rentals)
• Restaurants, liquor stores
• Entertainment, recreational services
• Personal services such as photographic studios,
  funeral services

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State and University Restrictions

• These transactions may not automatically
  decline, but are not allowed. They will be
  monitored for compliance through the review
  policy
• Personal purchases
• Cash Equivalents (ex. Gift Cards)
• Gifts, contributions, and donations (such as
  alcohol and flowers)
• Alcohol for any purpose
• Allowing someone else to use the card

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State and University Restrictions (cont)

• Personally accepting kickbacks or incentives
• Entertainment (costs of social activities and
  related incidental costs such as meals,
  beverages, lodging, transportation, and
  gratuities)
• Stringing purchases to avoid limit of delegated
  authority (5,000)

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State and University Restrictions (cont)

• Services provided by an unincorporated vendor
  (applies to services only these vendors must be
  incorporated)
• Food purchases must be well documented with the
  name and purpose of the function and who attended
  it, by name or affiliation. Costs for alcoholic
  beverages are not to be included under any
  circumstance.

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Purchases Requiring Additional Approval

• Licenses, contracts, and agreements must be sent
  to Procurement Supply for approval.
  Cardholders are not authorized signatories for
  the University
• Telecommunications equipment (antenna, satellite
  installations, 2-way radios) require approval
  from OIT/NTS
• Purchase of hazardous materials must be generated
  through Environmental Safety
• Modifications to building structure must be
  approved by and coordinated through Facilities
  Management

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Purchases Requiring Additional Approval (cont)

• Purchase of furniture (must be purchased from
  MCE, or must be documented on Potential Business
  for MCE form)
• All Contract and Grant funds shall be in
  compliance with the associated terms of the
  contract or grant
• Food purchases must be well documented with the
  name and purpose of the function and who attended
  it, by name or affiliation.

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Changes to Cardholder Information

• Request changes using Account Maintenance Request
  Form (available online)
• Cardholder Name or Address Change
• Default FRS Account Change
• Cancel Card
• Single Purchase or Monthly Credit Limit Change
  (as a minimum, requires department head approval)

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No Transactions in a Billing Period?

• Logs do not have to be approved
• Credit card statements will not be sent
• Review process is not required

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Reviewers Responsibilities
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Reviewers Responsibilities

• Reviewer is the cardholders immediate supervisor
  or someone within the cardholders chain of
  command
• Reviewers are required to ensure that charges are
  valid, authorized, are within UM Purchasing Card
  policy and procedures, and are appropriately
  documented
• A Reviewer may not review his/her own
  transactions

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Reviewers Responsibilities (cont)

• At the end of each billing period, the Reviewer
  is required to
• Review the transaction log to ensure all entries
  are authorized
• Ensure detailed receipt matches the transaction
  and description of purchase
• Confirm each transaction is authorized and in
  compliance with UM policies and procedures
• Confirm that no one other than the cardholder
  gained access to the card information

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Reviewers Responsibilities (cont)

• Sign the monthly transaction log for all
  cardholders for whom they review, certifying all
  transactions are authorized and that policy and
  procedures have been followed
• Electronically sign off verifying the review has
  been completed (procedures located at
  http//www.purchase.umd.edu/general/
  pcardresponsibilites.html)

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Reviewers Responsibilities (cont)

• Retain the records in chronological order in the
  departments business office, and securely
  maintain the files.
• Ensure Contract and Grant funds are spent within
  the contract or grant guidelines.
• Note Reviewers will receive an email
  notification each month reminding them that the
  review is due.
• Ensure cards are cancelled when a cardholder
  leaves the University or the department

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• Establishing the Review Process

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Establishing the Review Process

• Departments may require pre-authorization prior
  to cardholder making a purchase
• Some departments have established procedures
  (check with your Business Office)

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Establishing the Review Process (cont)

• You may have an administrative person perform
  initial review of records
• Ensure a detailed receipt is in the file, and
  that the receipt matches the description on the
  log
• Reconcile credit card statement to the
  transaction log
• Place receipts in same order as listed on the log
  and statement

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Establishing the Review Process (cont)

• Ask Questions have a clear understanding of why
  the purchase was made and who authorized it.
• Only the Reviewer (supervisor) can
• Certify that transactions are authorized (have
  you reviewed the receipt?)
• Sign the actual transaction log

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• Leaving the Department?

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Leaving the Department?

• If the cardholder leaves the department
• Cardholder or Reviewer Notifies the Delegated
  Procurement Team by submitting an Account
  Maintenance Form
• Reviewer shreds the card and discards it
• Reviewer performs complete assessment of all
  transactions

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Leaving the Department? (cont)

• Reviewer to conduct an exit review of departing
  cardholders transactions
• Ensure sensitive equipment (computers, digital
  cameras, etc.) are tagged in inventory
• Take another look at all records
• Trust everyone review anyway

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Leaving the Department? (cont)

• If the Reviewer leaves the department
• Another reviewer must be assigned to each
  cardholder
• Complete a Reviewer Access Request form
• Removing the previous reviewer
• Assigning a new reviewer
• Submit form to Delegated Procurement Team

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Forms

• All forms associated with the Purchasing Card are
  available online at
• www.purchase.umd.edu

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• Purchasing Card Fraud

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What is Fraud?

• A deception deliberately practiced in order to
  secure unfair or unlawful personal gain
• What Fraud is Not
• Misuse
• Negligence

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Misuse

• Restricted purchases made for the institution -
  not for personal gain
• Examples of misuse include
• Purchasing restricted goods and services (ie.
  Travel on a travel restricted card)
• Intentionally splitting a purchase to circumvent
  delegated authority (either by the initiative of
  cardholder or departmental authority)
• Paying unfair and unreasonable prices, not making
  good business decisions
• Allowing someone else to use the card

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Negligence

• Sloppy recordkeeping - not for personal gain
• Unsecured record retention
• Lack of one receipt
• Missing statements
• Lack of additionally required documentation

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Consequences of Misuse and Negligence

• Report misuse and negligence to Delegated
  Procurement Team
• Institute the 3 strikes, youre out rule
• Suspend card until cardholder attends another
  training (becomes HR issue)
• Cancel the card (coordinate with Delegated
  Procurement Team)

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Back to Fraud

• Why does fraud occur?
• How does fraud occur?

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Why Does Fraud Occur?

• Inattentive Reviewers - cardholders wont take
  the risk if they know their transactions are
  carefully reviewed
• Fraud is a premeditated, calculated act to
  defraud institution
• Crime of necessity (personal financial need)
• Crime of passion (desperation)
• Incident of bad judgment
• Program Weaknesses

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Program Weaknesses

• Department unnecessarily has too many cardholders
• Reviewers responsible for too many cardholders
• Insufficient training
• Faltering Reviewer (very dangerous as this is the
  first line of defense)
• We must have proper mechanisms installed to
  detect and halt fraud

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How Does Fraud Occur?

• Services paid for, but not received by the
  University (usually involves two individuals)
• Personal purchases made, and removed from
  institutions property or shipped to another
  location
• Personal purchases made in combination with
  authorized goods/services

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Consequences of Fraud

• Restitution
• Loss of Leave Time
• Suspension and/or Termination of Employment
• Fines
• Criminal Prosecution

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Review, Review, Review

• Reviewers are the Universitys first line of
  defense against purchasing card fraud.
• Purchasing card fraud is often a symptom of a
  bigger personnel issue.
• If you suspect purchasing card fraud, contact the
  Delegated Procurement Team Immediately.

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Contact Information

• Send an email to pcard_at_umd.edu to certify
  completion of reviewer training
• Contact the Delegated Procurement Team
• Voice Mail [phone]
• FAX [phone]
• Email pcard_at_umd.edu