4:055-AP1 – Controls for the Use of District Procurement Cards

This procedure implements, and is subject to, Board policy 4:055, Use of Procurement Cards. The business office shall oversee the following controls:

ISSUANCE OF DISTRICT  PROCUREMENT CARDS

1. Prior authorization will be required before issuing a card to any individual.
2. Cardholders will be required to sign 4:055-E1, Batavia Public Schools Procurement Card Use Agreement.
3. Cardholders will be instructed:
   1. In the proper use of cards, and;
   2. How to document purchases, including the need to: (a) present an itemized receipt in addition to a procurement card receipt for each item, (b) indicate the date, purpose, and nature of the charge on the receipt, and (c) identify the names of individuals for whom expenditures were incurred on the receipt.
   3. The merchant will need to be made aware that the purchase should be tax exempt.  The tax exempt number is located on the procurement card.  The user should verify that sales tax has not been charged.

MONITORING THAT PROCUREMENT CARDS ARE BEING USED FOR APPROPRIATE PURCHASES

1. The use of District procurement cards for personal expenses is prohibited.  There is no guarantee of reimbursement and the practice is a de facto loan available only to certain employees.
2. Cash advances and cash back from purchases are prohibited.  Rebates from procurement card purchases are the property of the District.
3. Reasonable credit limits will be established for each purchase, transaction, and/or the balance total on each card.  The limits on existing cards will be reduced if necessary. Require prior authorization for purchases above these limits.
4. When a card is used for ’emergency purposes’, require that the user clearly document the emergency situation that justified the need.
5. Block certain types of vendors or purchases using Merchant Category Codes – these categorize businesses by the products or services they provide.  Request that the card issuer prohibit charges from casinos, liquor stores, and other merchant categories the District will never use.
6. Scheduled and random analyses of individual cardholders will be performed. This includes examining the continued need for the card and the nature of purchases being made.
7. Scheduled and random analyses will be performed to determine whether Board policy is being followed.

SAFEGUARD DISTRICT PROCUREMENT CARDS

11. Cards will be issued in the names of specific individuals to help maintain accountability.
12. A card’s use by anyone other than the individual to whom a card is issued is prohibited.
13. Procedures to cancel cards when lost or stolen and when individuals leave employment will be developed and followed.
14. Existing cards that are not needed or accounted for will be canceled.
15. Master credit card lists will be reviewed and updated annually.

MONITOR PROCUREMENT CARD STATEMENTS

1. Statements will be reviewed for suspicious activity, such as, unusual destinations or items, purchases from a vendor whose reputation has not been verified, or purchases that would have been less expensive if another available payment method had been used.
2. Billing statements will be broken down by individual user.
3. A reconciliation process will include:
   1. Reconciling credit card statements to itemized receipts and invoices;
   2. Examining the documentation supporting purchases to ensure charges are authorized and reasonable;
   3. Delegating approval, verification, and payment of bills to different individuals; and
   4. Requiring someone other than the cardholder or an individual supervised by the cardholder to review and approve transactions.
4. Review all uses of a card via telephone, fax and the internet to be sure they were approved by Superintendent or designee.
5. Establish a way of recouping inappropriate charges.
6. Do not use automatic payment deductions to pay procurement card bills.
7. Billing statements will be broken down by individual user.
8. Discrepancies will be followed up on and resolved.
9. Receipt of items purchased will be verified.

Date Adopted:   October 30, 2008

Date Amended:   April 22, 2015