FORMS FOR REQUESTING A PROCARD

                                CONTACTS  (Bank, Procard Administrator, Central Receiving)

                                                     Can These Purchases Be Made On Procard?

THE ETSU PROCUREMENT CARD PROGRAM

I. THE PROCARD PROGRAM

A. Program Overview

The Procard program has been developed to streamline the purchasing process including requisitioning, procurement, receiving, and payment processing for low-value purchases less than $5,000. The program utilizes the First Tennessee Bank Visa Procurement Card as the payment-processing medium.

When placing an order with a vendor, cardholders use their Procard in lieu of departmental purchase orders or ETSU purchase orders.

Vendors submit Procard purchases to be processed through the Visa system. First Tennessee Bank generally pays the vendor within three to four working days.

A monthly summary billing statement is sent to each cardholder by First Tennessee Bank detailing all account charges. Each cardholder must maintain a log of purchases to compare with the monthly summary billing statement to ensure accuracy of charges. A monthly summary billing statement will not be received if there have been no charges made during the billing cycle.

A monthly master statement is sent to the ETSU Financial Accounting, which includes the charges from all departments. One consolidated monthly payment is then made to First Tennessee Bank. Each department’s account will be debited for the total amount of charges made against it during the month.
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B. Program Advantages

1. Reduced Workload – Processing of paperwork is significantly reduced for requisitioning, purchasing, receiving and accounts payable activities.

There is a large decrease in the volume of invoices and checks processed by Accounts Payable. A single electronic bank transaction replaces hundreds of invoices received and checks written, saving time and money.

2. Improved Deliveries and Quicker Information – Without delays in processing requisitions, the order is placed immediately by the departmental employee. The availability of items, order processing, and ship dates are known immediately.
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C. Program Administrator

The Purchasing Department administers the Procard Program (see attachment G).
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II. OPERATING PROCEDURES

The following detailed policies and procedures provide information on how to obtain a Procard account number, responsibilities by activity, account reconciliation, and who to contact for assistance with summary billing statements or charges.
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A. Account Description

The Visa account for the procurement program is a charge number issued in the name of the employee. Each card is assigned to a specific employee, department, and account number.

Due to the electronic nature of the Procard accounting system, charges will not be transferred between account numbers. Exceptions can only be made for unusual circumstances as approved by the Comptroller.
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B. Authorized Purchases

1. Supplies, except those described in section II.C. can be ordered directly from vendors. Any transactions outside the established parameters will automatically be declined at the point of sale.

2. Orders are to include only items that are to be charged directly to the departmental account. A purchase cannot be split between two account numbers. The object code for Procard purchases is 4570 (see attachment J).

3. The expenditure limit for this program is $4,999.99 for each transaction including shipping. Purchases of like or similar nature are not to be split in order to bypass the bid limit of $5,000. Splitting purchases to avoid the single transaction limit is not allowed. Failure to comply with these requirements may result in the department losing the Procard privilege.

a) Examples of erroneously splitting orders to avoid bidding:

(Order A) Furniture Inc. 11/6/06 desk chair	$1600
(Order B) Office Budget Furniture 11/6/06 desk	3900
	$5500
(Two orders for similar items, totaling $5000 or more, should be bid.)
(Order A) Furniture Inc. 11/6/06 desk chair	$1600
(Order B) Office Budget Furniture 11/9/06 desk	3900
	$5500
(Two orders for similar items on two different days, totaling $5000 or more, should be bid.)

These are similar items and should not be split into multiple orders. The bid limit is $5,000 including shipping costs. Orders should not be split to avoid the bid process.

b) Examples of erroneously splitting orders to avoid the single purchase limit:

(Order A) Furniture Inc. 11/6/06 desk chair	$1600
(Order B) FSI 11/6/06 desk	3900
	$5500

Orders should not be split to avoid the single purchase limit of $4,999.99. Departments should not allow the vendor to process two separate transactions to keep the dollar amounts less than the single purchase limit.

c) The combining of card accounts within a department to exceed the bid limit or single purchase limit is not allowed.
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C. Account Restrictions

The following are excluded from this program and may not be obtained with the Procard:

· Personal purchases or cash withdrawals

· Travel and entertainment expenses (see attachment M)

· Conferences, meetings, registrations, booth fees, dinners (including room rental, food, etc)

· Restaurants (fast food or otherwise)

· Advertisements (personnel or otherwise)

· Contracts or licensing agreements

o NOTE: Do not sign vendor contracts or licensing agreements. These should be forwarded to the Purchasing department with a departmental requisition, where the contract will be reviewed for language unacceptable to ETSU and the State of Tennessee.

· Food orders for $100 or more

· Maintenance & service agreements

· Printing & copying

· Carpet

· Animals

· Personal or medical services

· Used equipment

· Repairs

· Pagers or telephones of any type

· Gift certificates

· Computers

· Cannot be used with Prohibited Vendors (see attachment I)

Any use of this program for unauthorized transactions may result in disciplinary action including, but not limited to, the loss of Procard authorization, suspension or termination. Employee may be held personally liable for any misuse of Procards assigned to them.
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D. Opening of Accounts

The President, Vice Presidents, Deans, Directors and Department Heads are responsible for designating employees to receive the Procard and must use the Recommendation to Obtain VISA Procard form (see attachment A). Designated employees obtain a procurement charge account number by completing the Procurement Card Authorization form (see attachment B) and submitting it to ETSU’s Program Administrator. Legitimate charges made on the Procard are a University liability (not a personal liability to the individual). Employees should insure that Procards are adequately safeguarded from loss or misuse. See section IV for procedures to report lost cards.

There will be no credit reference checks on the personal credit of the employee for the University Procard. Nor will the use of the Procard have any effect on the employee’s personal credit rating.

Each employee designated to receive the Procard must attend a user training session. Training is provided by the Purchasing department. After completion of the training, the employee will receive a Procard issued by First Tennessee Bank.   Procards will only be issued to permanent full time and permanent part time employees.
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E. Account Closures

Procards are to be turned into the Program Administrator by employees upon termination for any reason, including retirement. Supervisors are responsible for ensuring that the Procard Administrator has been notified and has received the Procards.

Employees or supervisors of employees changing departments must contact the Program Administrator to close their accounts. If appropriate to the new position, the process for opening a new account will be followed. In addition to termination or changing departments, ETSU’s Program Administrator will close account numbers upon the request of the President, Vice Presidents, Deans, Directors or Department Heads.

The cardholders’ records are to remain in the department. Records must be kept for three years in addition to the current fiscal year. Records must be kept where they can be accessed for auditing purposes.
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F. Grants

The Principal Investigator must request the Procard with department head’s approval. Grant Accounting must approve the issuance of a Procard for each grant account. A minimum balance of $500 must be in a grant account supply budget before a procard will be issued. The Procard may be in the name of the P.I., or the person who does the actual buying with P.I. approval. Complete the Recommendation to Obtain VISA Procard for Grants/Foundation form (see attachment A1), and the Procurement Card Authorization form (see attachment B).

The Principal Investigator is to approve and date the monthly summary billing statement each month. If a grant account is overspent, the additional funds will come from a designated departmental account. In some cases, Grant Accounting may request copies of transactions and their backup. This is necessary for Grant Accounting to invoice for some accounts. Copies can be made for the Procard records.

At the grant expiration date, the Procard account will be closed. The Procard will be canceled on the 20^th of the month in order for any charges made during the month to have time to post to the account. The expired Procard is to be returned to the Procard Administrator. 

Multi-year grants, in which the ETSU account number changes each grant period, can be coded so the procard does not need to be canceled and reissued with each grant period. However, during the month that the grant expires, purchases cannot be placed on the procard between the 20^th of the month and the first of the following month. This is so that any charges made during the month have time to post to the account.
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G. Foundation

Procards may be issued for Foundation accounts when requested by the department head. Complete the Recommendation to Obtain VISA Procard for Grants/Foundation form (see attachment A.1). Foundation Accounting must approve requests for Foundation Procards.
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III. RESPONSIBILITIES

A. Requisitioner Activities

1. Departments are responsible for monitoring the appropriateness of purchases and insuring the availability of funds. In accordance with approved University policy, any budget account that reflects an aggregate over-run on travel, operating, and equipment at the end of the fiscal year may have the amount of the over-run deducted from the following year’s allocation.

2. Make sure purchases are being made with the correct Procard, charges will not be transferred between account numbers.

3. Order supplies as needed. No purchase order number is required. If a vendor asks for a purchase order number, use the word "VISA" or a departmental designated number assigned within each department.

4. Instruct the vendor where to deliver materials. It is important that the vendor record on the packing slip your complete name, department name, building, and room number on each order. The only information Central Receiving has concerning where to deliver your goods, are the vendors’ packing slips. Packages may be picked up personally by the department, delivered directly to the department, or sent to Central Receiving.

Central Receiving Address: (Your department name)
                                          East Tennessee State University
                                          100 C.R. Drive
                                          Johnson City, TN 37614

5. Procard users should tell vendors that ETSU is tax exempt before placing an order. The tax exempt number is printed on the front of the Visa card for both the University and Foundation. Employees may be personally liable for any taxes charged to the Procard.

6. Obtain the total cost of the order from the vendor (including estimated shipping cost) before the order is placed. The total order may not exceed $4,999.99.

7. An activity log (see attachments C,  D & D1) may be maintained to record purchases and credits, but is not required.  Some departments may find it necessary to maintain a log for their own  informational needs.

8. The purchaser will receive a monthly summary billing statement directly from First Tennessee Bank of all transactions posted to the account.

9. The cardholder must reconcile the monthly billing statement to the supporting documentation (sales slips, packing slips, etc.). Items ordered toward the end of the billing cycle, however, may be included on the next monthly summary billing statement.  The ETSU billing cycle ends the 27th of each month.  The transaction will not be posted on the day of the purchase. The transaction on average takes up to three or four days to post to your account. A statement will not be received if no purchases are made during the billing cycle.

10. The cardholder has sixty days, from the date of the charge, to place that charge in dispute with the bank. The cardholder must first try to reconcile the disputed charge with the vendor before contacting the bank.

11. Obtain necessary approvals of the summary billing statement by the department head or appropriate supervisory individual. The approval signature and date should be on the summary billing statement. Staple matching receipts and packing slips to the monthly summary statement. Do not send statements to Accounts Payable.

12. Maintain in the department:

Monthly summary billing statements
Supporting documentation including sales slips, packing slips, etc.

The department must keep these transaction records for three fiscal years beyond the current year (see attachment H). Records will periodically be audited by the Procard Administrator. Records can also be audited by Internal Auditor and State Audit.
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B. Procedures for Handling Discrepancies

1. Amount Is Correct on Monthly Summary Billing Statement

If the amount on the statement is different from the price quoted by vendor (excluding freight costs) or if tax is included in amount, contact the vendor to marrange a credit. 

If a charge needs to be disputed contact First Tennessee Bank (see attachment G).

If the amount on the statement is incorrect request the vendor to credit your card on the next statement. The log should be posted to ensure the credit is received.

If a copy of the transaction sales draft (vendor document provided First Tennessee Bank) is required to investigate the amount, call First Tennessee Bank (see attachment G).

2. Charge on Statement That Is Not Yours

    Contact the vendor to determine if the materials were ordered.  If the charge should not have been posted to your account, ask the vendor to credit your card.

3. Statement Charge from a Non-Approved Vendor or Suspected Fraudulent Charge

    Contact Program Administrator (see attachment G).
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C. Internal Controls

The summary billing statement must be signed and dated by the department head, principle investigator, or appropriate supervisory individual. Only a department head or principal investigator can sign their own statements. By approving the statement, that individual is stating that all charges are appropriate and correct. Reconciling the records and having the statements signed must be done soon after the statement is received, before the completion of another billing cycle.

Records must be kept in the department for three fiscal years following the current year (see attachment H). These are official ETSU records, which may only be disposed of in accordance with FP-9 of the Financial Procedures Manual (see attachment K).

If you purchase an item that you wish to have added to your department’s equipment inventory such as a television or video recorder, contact Inventory Control Manager at 94364.
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IV. ASSISTANCE

A. Lost or Stolen Card

Contact First Tennessee Bank immediately at 1-800-234-2840.  Then notify the Procard Administrator as soon as possible at 94741 or 94224.

B. Unrecognized or Unauthorized Charges

For purchases on the statement not recognized or authorized, see section III. B. Every effort should be made to resolve issues directly with the vendor prior to contact with First Tennessee Bank. If an issue is irreconcilable with a vendor or the bank, contact the Program Administrator at 94741 or 94224.
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C. Approval of Purchase Denied

If a vendor advises that approval has been denied by the credit card system, it is most likely a result of your monthly Procard limit being reached or exceeding the single purchase limit or using a blocked vendor type. The vendor will not have information related to the reason for denial, nor does the employee have authority to obtain the information from First Tennessee Bank.

The cardholder should contact the Program Administrator at 94741 or 94224. The issue will be resolved between the Program Administrator and First Tennessee Bank.

D. Obtain your Procard balance and available credit by calling the toll free number on the back of your Procard before you make a purchase.
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V. EXCEPTIONS

Exceptions to these procedures must be approved by the Director of Purchasing.
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