The procurement card program has been established to provide
a more efficient, cost-effective alternative for departments to make purchases
costing less than $5,000. Purchases over this amount must be bid, unless they are being purchased from existing framework orders or term contracts. Examples of such contracts would include the system-wide office supplies or lab supplies contacts. (See
POLICY FI0410 for bid limits and requirements and consult with your purchasing office for a list of existing framework orders or term contracts.) The procurement card may greatly reduce the department's need for petty cash accounts.
The procurement card is a special VISA credit card that works similarly to a personal credit card, except the charges are billed directly to the university and paid through the Treasurer's Office. The procurement card contains the cardholder's name and "The University of Tennessee." The phrase "tax exempt"" and the university's tax-exempt number are also printed on the card.
Using the procurement card will benefit the university, its vendors, and their departments. The university will save time and money by consolidating paperwork; vendors will receive payment more quickly; and departments will obtain the materials and services they need without unnecessary delays.
University employees who are issued a procurement card are provided the ability to make purchases on behalf of their department or unit up to the spending limits imposed by the card. Cardholders are expected to make sound business decisions in the best interests of the university, perform their duties competently, and comply with the following policies and procedures. (See 14 below for eligibility requirements.) The department head, however, retains ultimate responsibility for purchases with procurement cards and the administration of the program in his or her department. The department head, therefore, is expected to make reasonable efforts to select appropriate employees as cardholders and ensure that these employees use the cards in a proper manner and in compliance with university policies.
Serious violations of procurement card policies may result in disciplinary action. Examples of such violations include splitting transactions to avoid the requirements of the university's purchasing and procurement card policies, routinely failing to review and approve statements, routinely failing to retain receipts, and making inappropriate purchases. Personal use of the procurement card is theft. See
HUMAN RESOURCES POLICY HR0525 for more information on disciplinary
Procurement cards are for business use only. The following
purchases are prohibited:
Purchase of any type
of equipment over $1,500 (including shipping) that would be considered sensitive minor equipment
(general ledger account 439400; see
FISCAL POLICY FI0605)
$5,000 or more from the same vendor, including multiple like or unlike purchases
unless the items being purchased are from an existing framework order or term contract (for details see 6 below)
Cash refunds from returned
Personal service contracts or those contracts that are processed through the Contract system
Note: Entertainment-type items under $500 per function
may be purchased with the procurement card, subject to the approval and
documentation requirements of FISCAL
POLICY FI0715, 5. Such purchases may be made only from vendors
that accept the card (i.e., the card is blocked at restaurants, hotels,
and other travel-related vendors). The invoice must contain the date of
the function, number of individuals being entertained, price per unit (meal,
ticket), and total amount due. The purpose of the function must be written
on the invoice or an attachment. The cost center/WBS element and the general
ledger account to be charged (446200, 449200, or 449300) should also be documented on the invoice.
Travel, including airlines,
hotels, registration fees, automobile expenses, and meals (see
FISCAL POLICY FI0705
for details) (registration fees for webinars at local station may be paid with P-card)
Cellular telephone equipment
Purchases from other
university departments, including bookstores
by university fiscal policy on purchasing (see
FISCAL POLICY FI0405
Purchases are charged to the cardholder's department (see 18 below). Each card has specific spending limits: $4,999.99 per transaction and a preset maximum for each 30-day billing cycle, typically $20,000. Each time the card is used, an electronic process verifies that the purchase is within these predetermined limits. If a purchase violates these limits, the vendor will not accept the order.
Changes to the spending limits will be considered upon written request by the
department head to the program administrator. See
SPENDING LIMIT CHANGE FORM.
not split single transactions in excess of $4,999.99 into smaller
FISCAL POLICY FI0410, 1.) To stay within the spending limit, departments may not make multiple purchases of or request multiple invoices for single purchases of identical goods or modular components from the same vendor, unless these items are under an existing framework order or term contract. Although not an all-inclusive list, the following situations represent split transactions and are prohibited by this policy.
Requesting a vendor
to invoice items separately to avoid the spending limit.
Making partial payments
against a single invoice to avoid the spending limit.
Purchasing items in
groups and making multiple purchases for a single purpose to avoid the
Purchasing like items
on a regular basis which would exceed the spending limit if purchased
together, unless purchased on a current contract.
For more information on what constitutes
a split transaction and whether items should be bid, employees should consult the
campus or unit purchasing department.
Always try to obtain
the best possible value for the university with the procurement card.
Keep the card in a secure
location and keep the card number confidential.
Exercise caution in
sharing account information.
Ensure that state sales
tax is not charged when making a purchase. The university's tax-exempt number
is printed on the face of the procurement card.
Obtain and keep receipts
and maintain detailed information for each card transaction. (For more details,
see 17 below. A receipt must be obtained for each
purchase or transaction. Receipts are critical to the success and
integrity of the procurement card program.
Obtain a monthly statement
printed from the university's accounting system. Review the statement
for accuracy. (see 18 below). Sign the statement
and forward it and the receipts to the appropriate individual in the department
for verification (see 8 below).
Resolve all incorrect charges and product returns
with the merchant or vendor as quickly as possible (see 23-24
below). Call the card provider immediately if the card is lost or
stolen and notify the campus or unit coordinator and the program
administration in the Treasurer's Office (see 25
The departmental verifier is responsible for verifying receipts with the monthly statements and has the following duties. If possible, the verifier should be an employee other than the cardholder and is normally the bookkeeper (see 9 below).
Attend the required
accounting system training on procurement cards.
Obtain a signed monthly
statement and supporting original receipts from each cardholder in the verifier's
area of responsibility.
Verify the statement by ensuring that receipts are in hand for all transactions listed on the cardholder's monthly statement. Confirm that the receipts are acceptable documents according to university policy and the items purchased appear to be legitimate in nature. (See 24 below for instructions on handling incorrect charges.) Failure to routinely verify statements may
result in disciplinary action.
Report any questionable
purchases to the attention of the department head or the campus internal
Sign the cardholder
statement signifying that it has been verified, as described above.
Distribute the charges
to the appropriate cost centers/WBS elements and general ledger accounts
as necessary on the university's accounting system. (For more details, see
19 below.) The distribution must be completed in a timely
manner that allows the approval process to be completed by the deadline.
The distribution should proceed even if the verifier does not have all of
the receipts or some transactions are disputed.
Maintain a file of signed statements with original
receipts attached for six years.
Ensure that reconciled statements and supporting documents are retained for six years or three years after a sponsored project has ended, whichever is longer.
Department Head/Approver Responsibilities
The department head is ultimately
accountable for appropriate procurement card use in the department. The department
head has the following responsibilities.
Select and approve employees
who are eligible to apply for a procurement card.
who will be responsible for verifying monthly statements. The verifier must
have access to and be trained to use the university's accounting system.
If possible, the verifier should be an employee other than the cardholder
and is normally the departmental bookkeeper (see 8 below).
Ensure that cardholders
and verifiers abide by university policies and procedures governing the
procurement card program, as well as university purchasing policies and
Ensure that reconciled
statements and supporting documents are retained for six years.
The department head (or designee) is normally the approver. The approver must be authorized to approve the expenditure of university funds and should have knowledge of the department's procurement card activities. The approver is responsible for the final approval of procurement card statements and has the following responsibilities.
Obtain training for
electronic approvals on the university's accounting system.
Review procurement card
statements on the electronic approval system for approval or rejection.
Approval indicates that the purchases and the distribution of charges are
appropriate. Approve appropriate statements by the Treasurer's Office deadline.
Electronically reject statements requiring further processing by the verifier. The approver should attach an explanation indicating why the statement was rejected. Approvers should reject statements when they suspect an inappropriate purchase (that has not been marked as disputed), when they do not have enough supporting documentation to make an informed decision about the appropriateness of a purchase, or when the distribution of charges needs to be changed.
Campus/Unit Coordinator Responsibilities
The campus or unit coordinator
is the individual at the campus or unit level responsible for administrative
and managerial functions associated with the procurement card program, as follows.
Distribute the procurement
card policy to affected employees.
Review, approve, and
forward card applications to the program administrator (see below).
Ensure that training
is conducted for verifiers (university accounting system) and department
heads or their designees (electronic approval system).
Verify, for applicable
campuses and units, that card applicants have completed the procurement
card questionnaire before a card is issued.
Distribute new and replacement
Collect and dispose
of expired cards.
Maintain file of executed cardholder agreements. New
cards should not be distributed to employees until agreements are executed
and the questionnaire is completed.
Program Administrator Responsibilities
The responsibility for the administration of the procurement card program has been assigned to the Accounts Payable department in the Treasurer's Office. The program administrator resides in Accounts Payable and serves as the primary liaison between the card provider and the university. Duties include the following.
Manage the flow of information
into the university's accounting system.
and verify, for applicable campuses and units, that card applicants have
completed the procurement card questionnaire before cards are issued. Request cards
cards to the campus or unit coordinators.
Review and pay monthly
invoices from the card provider.
Answer questions and
solve problems regarding the program.
Manage and maintain the card providerís reporting system.
Departments are subject to periodic audits of procurement card activity. Significant failure to comply with university policy in the use or administration of the cards may result in cancellation of a card and/or disciplinary action, including employee termination. (See 3 above for more details.)
University employees who have the responsibility for making purchases on behalf of their departments and have the approval of their department head are eligible for a procurement card. If possible, the cardholder should not be the verifier. Cards may not be issued to independent contractors, temporary employees, students, or any non-employee without permission from the Chief Financial Officer.
Application Process. To receive a card,
employees must complete the
PROCUREMENT CARD APPLICATION. The department head will approve
the application and forward it to the campus or unit coordinator. The coordinator
will review, approve, and forward it to Accounts Payable in the Treasurer's
The application will be reviewed and processed by the Treasurer's Office. The card will be issued in approximately two weeks. The new card will be sent to the campus or unit coordinator for distribution,
who will notify the employee when the card is ready.
Before receiving a card, employees must complete the
PROCUREMENT CARD QUESTIONNAIRE and sign a
CARDHOLDER AGREEMENT. After verifying the employee completed the questionnaire,
the campus or unit coordinator will give employees their card in exchange for
the signed agreement. Cards are automatically renewed. Old cards must be cut
in half and returned to the campus or unit coordinator for disposal.
Cardholders must follow
the guidelines below when making purchases.
If the intended purchase
is less than $5,000 , find a vendor who accepts VISA and provides the best
value to the university.
Ensure that the vendor
will issue a proper receipt (see 17 below).
Obtain a receipt for
Ensure that the purchase
does not include sales tax.
When ordering over the telephone or the Internet, the cardholder should tell the vendor that he or she is from the University of Tennessee and is making the purchase with a VISA procurement card. The vendor should be given the card name, card number, expiration date, and delivery address. A receipt and confirmation number should be requested at this time. The delivery address must be the cardholder's official address on file with VISA. Emphasize that the purchase is exempt from state sales tax.
Inspect the order to verify accuracy, quality, and
Acceptable receipts include
vendor invoices, charge slips, cash register receipts, packing slips, or printout
of E-mail or web page transaction confirmation, provided they include the following
of goods or services purchased, including unit price
Generally, order forms are not acceptable
as receipts, For subscriptions, a copy of the renewal notic e or initial subscription
request is considered a receipt.
Receipts that do not clearly list the required information described above or that
are not originals will not be considered adequate documentation. In such cases,
SUPPLEMENTAL RECEIPT FORM to the available documentation detailing
the required information. Note: A SUPPLEMENTAL RECEIPT FORM alone does
not constitute an adequate receipt.
The monthly statement will
be available in the accounting system on the first or second business day of
the month. No payment should be sent to the card provider. The statement should be reviewed
and reconciled as described below.
The cardholder must
obtain a monthly statement printed from the accounting system.
The cardholder should
review the statement to ensure that the transactions and amounts listed
are correct. Specifically, check for the following information.
Amounts on the statement
that are higher than the receipts (may need to allow for shipping charges)
Items on the statement
not purchased by the cardholder
If a discrepancy is
found, the steps in 23-24 below should be followed.
The cardholder should
sign the statement. The cardholder's signature affirms that (1) the charges
are correct with exceptions noted, (2) all receipts are included, and (3)
all expenditures are properly authorized business purchases.
The cardholder should
forward the signed statement and original receipts to the individual who
is responsible for verifying procurement card purchases in the department.
The person who is responsible
for verifying procurement card purchases completes the steps described in
8 above and electronically distributes the charges by the
Treasurer's Office deadline (the 25th of each month).
The department head
or approver reviews and electronically approves the accounting distribution
of monthly charges by the Treasurer's Office deadline (the 25th of the month).
Settlements and receipts
should be maintained in departmental files for six years.
Any noncompliance should be reported to the program
Each procurement card is associated with a default departmental cost center/WBS element number. As part of the application process, each applicant provides a default cost center/WBS element number that will initially be charged for transactions associated with the applicant's card. In addition, all transactions will initially be charged to the general ledger (G/L) account number for supplies (439100). However, transactions are not posted to the cost center/WBS elements until the next month, allowing departments the opportunity to distribute the transactions to other cost center/WBS elements and/or G/L accounts if the default values are not appropriate. It is important that the G/L account accurately reflect the correct expense category.
The charges are distributed in the following manner.
The cost center/WBS
elements will be charged monthly in arrears (except June) following the
expense verification and distribution actions by the department.
Expenses not distributed
by the department before the Treasurer's Office deadline (25th of the following
month) will be charged to the departmental default cost center/WBS element.
Departments may wish to establish a departmental clearing (expense) cost center as the default cost center. Departments are responsible for transferring all expenses from this cost center to the appropriate responsible cost center/WBS elements each month. (Departments are strongly encouraged to use the university's accounting system for transferring or distributing these expenses.) Any undistributed charges in the clearing cost center at fiscal year-end will be automatically expensed to the department's general operating cost center/WBS element.
Departments must request any changes to the default
cost center/WBS element by memo or email to the campus or unit coordinator.
Charges made June 28th-30th will be charged to the new fiscal year.
In the event it is necessary
to cancel a procurement card, the cardholder must return the card to the department
head. The department head will forward the card to the campus or unit coordinator
with an explanation of why it is to be canceled.
The campus or unit coordinator will cut the card in half and notify the program
administrator that it should be canceled. The program administrator will notify
the card provider of the cancellation.
A procurement card should
be canceled if any of the following conditions arise.
the card number has been or may be used without authorization (i.e., stolen).
See 25 below.
Cardholder has transferred
to another university department.
Cardholder seldom or
never uses the card.
Cardholder is no longer
employed by the university.
Cardholder goes on leave
Cardholder is requested
to surrender card due to violation of policies.
decides to no longer participate in the program.
In addition, the university has the
right to cancel the card of any employee at its discretion.
The procedures below should
be noted when returning an item.
For a purchase made
in person, return the item directly to the vendor and obtain a credit receipt.
Cash refunds are prohibited.
For a purchase by phone,
mail, or fax:
Contact the vendor
for return instructions.
Obtain a return
reference number from the vendor, e.g., Returned Material Authorization
(RMA) or credit number. Note: Some vendors may charge a restocking or
or department shipping procedures to return the item to the vendor.
On the paper statement
where the original charge appears, note the date of the return. Be sure
to check subsequent statements to verify that credit was received for the
For refunds to a canceled card, the department should
request a credit memo from the vendor for the amount of the refund. The
department may apply the credit memo to future purchases or send it to the
Treasurer's Office to be processed as a refund from the vendor.
If an item on the monthly statement is incorrect, call
the vendor immediately to resolve the disputed charge. If the vendor does not
resolve the discrepancy within 30 days, fax a completed
DISPUTED TRANSACTION FORM to the card provider at (888) 678-6046.
The card provider will issue a temporary credit until the dispute is resolved, usually
within 60-90 days.
Vendors have a right to solve a problem with a purchase within a reasonable
period of time. Thus, when either an incorrect or defective item is received,
the cardholder must allow the vendor a reasonable amount of time to either replace
the product, resolve the service issue, or issue a credit before turning the
matter over to the card provider.
The cardholder should immediately call Bank of America at (888) 449-2273
as soon as he or she realizes the procurement card has been lost or stolen.
Representatives are available 24 hours a day.
Note the name of the bank employee who takes the call and the exact time called.
Record this information on the
LOST/STOLEN/COMPROMISED CARD NOTIFICATION FORM. Then notify the campus
or unit coordinator and the program administrator by phone.
Within two days of calling the bank, fax a completed LOST/STOLEN CARD NOTIFICATION FORM to the program administrator
at (865) 974-2701. The bank will block further use of the existing card and
issue a new card and account number.