purchasing card reviewer training. purchasing card benefits convenience convenience faster receipt...

Purchasing Card Reviewer Training

Purchasing Card Benefits

Convenience Faster receipt of needed supplies Reducing purchase orders More vendors to choose from Reducing the number of checks

issued Cost savings; * the cost of traditional

purchase order is $89.11, the cost of using purchasing cards is $21.83

*2007 Purchasing Card Benchmark Survey Results-RPMG Research Corporation

We will cover:

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

Cardholder’s 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

Cardholder’s Responsibilities (con’t)

Ensuring credits are received 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. However, budget management is the responsibility of the department head.

Reconcile Monthly VISA Statement

Compare VISA statement to transaction log and resolve any discrepancies prior to the end of the following billing cycle.

Keep all receipts and related paperwork (VISA statement, signed transaction log) for (5) five years.

Forward entire package to reviewer within 3 days of completion

Restrictions

Restrictions at Point of SaleThese 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, salons, spas

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

State and University Restrictions (con’t)

Personally accepting kickbacks or incentives

Entertainment (costs of social activities and related incidental costs such as meals, beverages, lodging, transportation, and gratuities)

Splitting purchases to avoid limit of delegated authority ($2,500) is prohibited

State and University Restrictions (con’t)

Office supplies purchased from vendors other than the mandatory state contract with Office Depot

Mandated state contract Food purchases Tires Computers

Purchases Requiring Additional Approval

Licenses, contracts, and agreements must be sent to Purchasing Department for approval. Cardholders are not authorized signatories for the University

Telecommunications equipment (antenna, satellite installations, 2-way radios)

Modifications to building

Changes to Cardholder Information

Request changes by contacting the Purchasing Department

Cardholder Name or Address Change Default Account Change Cancel Card Single Purchase or Monthly Credit Limit

Change (as a minimum, requires department head and purchasing department approval)

Reviewer’s Responsibilities

Reviewer’s Responsibilities

Reviewer is the cardholder’s immediate supervisor or someone within the cardholder’s chain of command

Reviewers are required to ensure that charges are valid, authorized, are within ASU Beebe Purchasing Card policy and procedures, and are appropriately documented

A Reviewer may not review his/her own transactions

Reviewer’s Responsibilities (con’t)

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 ASU Beebe Purchasing policies and procedures

Confirm that no one other than the cardholder gained access to the card information

Reviewer’s Responsibilities (con’t)

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

Forward to the Purchasing Department

Reviewer’s Responsibilities (con’t)

Retain the records in chronological order in the department’s office, and securely maintain the files for a minimum of 5 years.

Establishing the Review Process

Establishing the Review Process

At the discretion of the Reviewer, departments may require pre-authorization prior to cardholder making a purchase

Establishing the Review Process (con’t)

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 statement

Establishing the Review Process (con’t)

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

Leaving the Department?

Leaving the Department?

If the cardholder leaves the department Cardholder or Reviewer Notifies the

Purchasing Department Brings the card to the Purchasing

Department Reviewer performs complete

assessment of all transactions

Leaving the Department? (con’t)

Reviewer to conduct an exit review of departing cardholder’s transactions

Ensure sensitive equipment (computers, digital cameras, etc.) are accounted for

Take another look at all records Trust everyone – review anyway

Leaving the Department? (con’t)

If the Reviewer leaves the department Another reviewer must be assigned to

each cardholder

Forms

All forms associated with the Purchasing Card are available online at

www.asub.eduFaculty StaffPurchasing

Purchasing Card Fraud

What is Fraud?

A deception deliberately practiced in order to secure unfair or unlawful personal gain

What Fraud is NotMisuse Negligence

Misuse Restricted purchases made for the

institution - not for personal gain Examples of misuse include:

Purchasing restricted goods and services (ie. Travel Computers, Office Supplies, Food)

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

Negligence

Sloppy recordkeeping - not for personal gain

Unsecured record retention Lack of any receipt Missing statements Lack of additionally required

documentation

Consequences of Misuse and Negligence

Report misuse and negligence to the Purchasing Department

Suspend card until cardholder attends another training

Institute the “3 strikes, you’re out” rule

Cancel the card

Back to Fraud

Why does fraud occur?

How does fraud occur?

Why Does Fraud Occur? Inattentive Reviewers - cardholders

won’t 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

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

How Does Fraud Occur?

Services paid for, but not received by the University (usually involves two individuals)

Personal purchases made, and removed from institution’s property or shipped to another location

Personal purchases made in combination with authorized goods/services

Consequences of Fraud

Restitution Termination of Employment Fines Criminal Prosecution

Review, Review, Review

Reviewers are the University’s 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 Purchasing Department

Contact Information

Stephanie Creedsacreed@asub.edu501 882 4547

Beki Wisdombawisdom@asub.edu501 882 4546