Purchasing Card Reviewer Training. We will cover: Cardholder Responsibilities Cardholder...
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Transcript of Purchasing Card Reviewer Training. We will cover: Cardholder Responsibilities Cardholder...
We will cover:We will cover:
Cardholder ResponsibilitiesCardholder Responsibilities RestrictionsRestrictions Purchases Requiring ApprovalPurchases Requiring Approval Changes to Cardholder Changes to Cardholder InformationInformation Reviewer’s ResponsibilitiesReviewer’s Responsibilities Establishing the Review ProcessEstablishing the Review Process Leaving the DepartmentLeaving the Department Location of FormsLocation of Forms Purchasing Card FraudPurchasing Card Fraud Contact InformationContact Information
Cardholder’s Cardholder’s ResponsibilitiesResponsibilities
Making only authorized purchases Making only authorized purchases Obtaining a detailed receipt for each Obtaining a detailed receipt for each
purchasepurchase Completing the transaction log Completing the transaction log with a with a
brief description justifying the brief description justifying the purchase purchase
Reconciling the monthly Visa Reconciling the monthly Visa statement statement
Resolving any discrepanciesResolving any discrepancies
Cardholder’s Cardholder’s Responsibilities (con’t)Responsibilities (con’t)
Ensuring credits are receivedEnsuring credits are received Documenting furniture and food Documenting furniture and food
purchases as requiredpurchases as required Signing the logSigning the log Passing the paperwork to assigned Passing the paperwork to assigned
Reviewer for approval in a timely mannerReviewer for approval in a timely manner Note: Reallocation of charges may be Note: Reallocation of charges may be
the responsibility of the cardholder, but the responsibility of the cardholder, but this decision is made at the department this decision is made at the department level.level.
Reconcile Monthly VISA Reconcile Monthly VISA StatementStatement
Compare VISA statement to Compare VISA statement to transaction log and resolve any transaction log and resolve any discrepancies in a timely mannerdiscrepancies in a timely manner
Keep all receipts and related Keep all receipts and related paperwork (VISA statement, signed paperwork (VISA statement, signed transaction log) togethertransaction log) together
Forward entire package to reviewer Forward entire package to reviewer within 3 days of completionwithin 3 days of completion
Restrictions at Point of SaleRestrictions at Point of SaleThese transactions will be declined by These transactions will be declined by
the bank:the bank: Purchases exceeding the single Purchases exceeding the single
purchase limit or monthly credit limitpurchase limit or monthly credit limit Cash advancesCash advances Restrictions by merchant categoryRestrictions by merchant category Travel (Hotels, Airfare, Car Rentals)Travel (Hotels, Airfare, Car Rentals) Restaurants, liquor storesRestaurants, liquor stores Entertainment, recreational servicesEntertainment, recreational services Personal services such as Personal services such as
photographic studios, funeral servicesphotographic studios, funeral services
State and University State and University RestrictionsRestrictions
These transactions may not automatically These transactions may not automatically decline, but are not allowed. They will be decline, but are not allowed. They will be monitored for compliance through the monitored for compliance through the review policyreview policy
Personal purchasesPersonal purchases Cash Equivalents (ex. Gift Cards)Cash Equivalents (ex. Gift Cards) Gifts, contributions, and donations (such as Gifts, contributions, and donations (such as
alcohol and flowers)alcohol and flowers) Alcohol for any purposeAlcohol for any purpose Allowing someone else to use the cardAllowing someone else to use the card
State and University State and University Restrictions (con’t)Restrictions (con’t)
Personally accepting kickbacks or Personally accepting kickbacks or incentivesincentives
Entertainment (costs of social Entertainment (costs of social activities and related incidental costs activities and related incidental costs such as meals, beverages, lodging, such as meals, beverages, lodging, transportation, and gratuities)transportation, and gratuities)
Stringing purchases to avoid limit of Stringing purchases to avoid limit of delegated authority ($5,000)delegated authority ($5,000)
State and University State and University Restrictions (con’t)Restrictions (con’t)
ServicesServices provided by an unincorporated provided by an unincorporated vendor (applies to services only – these vendor (applies to services only – these vendors must be incorporated)vendors must be incorporated)
Food purchases must be well documented Food purchases must be well documented with the name and purpose of the function with the name and purpose of the function and who attended it, by name or and who attended it, by name or affiliation. Costs for alcoholic beverages affiliation. Costs for alcoholic beverages are not to be included under any are not to be included under any circumstance.circumstance.
Purchases Requiring Purchases Requiring Additional ApprovalAdditional Approval
Licenses, contracts, and agreements must Licenses, contracts, and agreements must be sent to Procurement & Supply for be sent to Procurement & Supply for approval. Cardholders are not authorized approval. Cardholders are not authorized signatories for the Universitysignatories for the University
Telecommunications equipment (antenna, Telecommunications equipment (antenna, satellite installations, 2-way radios) satellite installations, 2-way radios) require approval from OIT/NTSrequire approval from OIT/NTS
Purchase of hazardous materials must be Purchase of hazardous materials must be generated through Environmental Safetygenerated through Environmental Safety
Modifications to building structure must be Modifications to building structure must be approved by and coordinated through approved by and coordinated through Facilities ManagementFacilities Management
Purchases Requiring Purchases Requiring Additional Approval (con’t)Additional Approval (con’t)
Purchase of furniture (must be purchased Purchase of furniture (must be purchased from MCE, or must be documented on from MCE, or must be documented on Potential Business for MCE form)Potential Business for MCE form)
All Contract and Grant funds shall be in All Contract and Grant funds shall be in compliance with the associated terms of compliance with the associated terms of the contract or grantthe contract or grant
Food purchases must be well documented Food purchases must be well documented with the name and purpose of the function with the name and purpose of the function and who attended it, by name or and who attended it, by name or affiliation.affiliation.
Changes to Cardholder Changes to Cardholder Information Information
Request changes using Account Request changes using Account Maintenance Request Form (available Maintenance Request Form (available online)online)
Cardholder Name or Address ChangeCardholder Name or Address Change Default FRS Account ChangeDefault FRS Account Change Cancel CardCancel Card Single Purchase or Monthly Credit Limit Single Purchase or Monthly Credit Limit
Change (as a minimum, requires Change (as a minimum, requires department head approval)department head approval)
No Transactions in a Billing No Transactions in a Billing Period?Period?
Logs do not have to be approvedLogs do not have to be approved Credit card statements will not be Credit card statements will not be
sent sent Review process is not required Review process is not required
Reviewer’s Reviewer’s ResponsibilitiesResponsibilities
Reviewer is the cardholder’s immediate Reviewer is the cardholder’s immediate supervisor or someone within the supervisor or someone within the cardholder’s chain of commandcardholder’s chain of command
Reviewers are required to ensure that Reviewers are required to ensure that charges are valid, authorized, are within charges are valid, authorized, are within UM Purchasing Card policy and procedures, UM Purchasing Card policy and procedures, and are appropriately documented and are appropriately documented
A Reviewer may not review his/her A Reviewer may not review his/her own transactionsown transactions
Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)
At the end of each billing period, the At the end of each billing period, the Reviewer is required to:Reviewer is required to: Review the transaction log to ensure all Review the transaction log to ensure all
entries are authorizedentries are authorized Ensure detailed receipt matches the Ensure detailed receipt matches the
transaction and description of purchasetransaction and description of purchase Confirm each transaction is authorized and in Confirm each transaction is authorized and in
compliance with UM policies and procedures compliance with UM policies and procedures Confirm that no one other than the Confirm that no one other than the
cardholder gained access to the card cardholder gained access to the card informationinformation
Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)
Sign the monthly transaction log for all Sign the monthly transaction log for all cardholders for whom they review, cardholders for whom they review, certifying all transactions are authorized certifying all transactions are authorized and that policy and procedures have been and that policy and procedures have been followedfollowed
Electronically sign off verifying the review Electronically sign off verifying the review has been completed (procedures located has been completed (procedures located at http://www.purchase.umd.edu/general/ at http://www.purchase.umd.edu/general/ pcardresponsibilites.html)pcardresponsibilites.html)
Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)
Retain the records in chronological order Retain the records in chronological order in the department’s business office, and in the department’s business office, and securely maintain the files.securely maintain the files.
Ensure Contract and Grant funds are Ensure Contract and Grant funds are spent within the contract or grant spent within the contract or grant guidelines.guidelines.
Note: Reviewers will receive an email Note: Reviewers will receive an email notification each month reminding them notification each month reminding them that the review is due.that the review is due.
Ensure cards are cancelled when a Ensure cards are cancelled when a cardholder leaves the University or cardholder leaves the University or the departmentthe department
Establishing the Review Establishing the Review ProcessProcess
Departments may require pre-Departments may require pre-authorization prior to cardholder authorization prior to cardholder making a purchase making a purchase
Some departments have established Some departments have established procedures (check with your procedures (check with your Business Office)Business Office)
Establishing the Review Establishing the Review Process (con’t)Process (con’t)
You may have an administrative person You may have an administrative person perform initial review of records:perform initial review of records: Ensure a detailed receipt is in the file, and Ensure a detailed receipt is in the file, and
that the receipt matches the description that the receipt matches the description on the logon the log
Reconcile credit card statement to the Reconcile credit card statement to the transaction logtransaction log
Place receipts in same order as listed on Place receipts in same order as listed on the log and statementthe log and statement
Establishing the Review Establishing the Review Process (con’t)Process (con’t)
Ask Questions – have a clear Ask Questions – have a clear understanding of why the purchase understanding of why the purchase was made and who authorized it.was made and who authorized it.
Only the Reviewer (supervisor) can:Only the Reviewer (supervisor) can: Certify that transactions are authorized Certify that transactions are authorized
(have you reviewed the receipt?)(have you reviewed the receipt?) Sign the actual transaction logSign the actual transaction log
Leaving the Department?Leaving the Department?
If the If the cardholder cardholder leaves the leaves the department department Cardholder or Reviewer Notifies the Cardholder or Reviewer Notifies the
Delegated Procurement Team by Delegated Procurement Team by submitting an Account Maintenance Formsubmitting an Account Maintenance Form
Reviewer shreds the card and discards itReviewer shreds the card and discards it Reviewer performs complete assessment Reviewer performs complete assessment
of all transactions of all transactions
Leaving the Department? Leaving the Department? (con’t)(con’t)
Reviewer to conduct an exit review of Reviewer to conduct an exit review of departing cardholder’s transactionsdeparting cardholder’s transactions
Ensure sensitive equipment Ensure sensitive equipment (computers, digital cameras, etc.) are (computers, digital cameras, etc.) are tagged in inventorytagged in inventory
Take another look at all recordsTake another look at all records Trust everyone – review anywayTrust everyone – review anyway
Leaving the Department? Leaving the Department? (con’t) (con’t)
If the If the ReviewerReviewer leaves the department leaves the department Another reviewer must be assigned to each Another reviewer must be assigned to each
cardholdercardholder Complete a Reviewer Access Request form Complete a Reviewer Access Request form
Removing the previous reviewer Removing the previous reviewer Assigning a new reviewer Assigning a new reviewer
Submit form to Delegated Procurement Submit form to Delegated Procurement TeamTeam
FormsForms
All forms associated with the All forms associated with the Purchasing Card are available online Purchasing Card are available online at at
www.purchase.umd.edu www.purchase.umd.edu
What isWhat is Fraud?Fraud?
A deception deliberately practiced A deception deliberately practiced in order to secure unfair or in order to secure unfair or unlawful personal gainunlawful personal gain
What Fraud is NotWhat Fraud is NotMisuse Misuse
NegligenceNegligence
Misuse Misuse Restricted purchases made for the Restricted purchases made for the
institution - institution - not for personal gainnot for personal gain Examples of misuse include:Examples of misuse include:
Purchasing restricted goods and services (ie. Purchasing restricted goods and services (ie. Travel on a travel restricted card)Travel on a travel restricted card)
Intentionally splitting a purchase to circumvent Intentionally splitting a purchase to circumvent delegated authority (either by the initiative of delegated authority (either by the initiative of cardholder or departmental authority)cardholder or departmental authority)
Paying unfair and unreasonable prices, not Paying unfair and unreasonable prices, not making good business decisionsmaking good business decisions
Allowing someone else to use the cardAllowing someone else to use the card
NegligenceNegligence
Sloppy recordkeeping - Sloppy recordkeeping - not for not for personal gainpersonal gain
Unsecured record retentionUnsecured record retention Lack of one receiptLack of one receipt Missing statementsMissing statements Lack of additionally required Lack of additionally required
documentation documentation
Consequences of Misuse Consequences of Misuse and Negligenceand Negligence
Report misuse and negligence to Report misuse and negligence to Delegated Procurement Team Delegated Procurement Team
Institute the “3 strikes, you’re out” ruleInstitute the “3 strikes, you’re out” rule Suspend card until cardholder attends Suspend card until cardholder attends
another training (becomes HR issue)another training (becomes HR issue) Cancel the card (coordinate with Cancel the card (coordinate with
Delegated Procurement Team)Delegated Procurement Team)
Back to FraudBack to Fraud
Why does fraud occur?Why does fraud occur?
How does fraud occur?How does fraud occur?
Why Does Fraud Occur?Why Does Fraud Occur? Inattentive Reviewers - cardholders Inattentive Reviewers - cardholders
won’t take the risk if they know their won’t take the risk if they know their transactions are carefully reviewedtransactions are carefully reviewed
Fraud is a premeditated, calculated act to Fraud is a premeditated, calculated act to defraud institutiondefraud institution
Crime of necessity (personal financial need)Crime of necessity (personal financial need) Crime of passion (desperation)Crime of passion (desperation) Incident of bad judgmentIncident of bad judgment Program WeaknessesProgram Weaknesses
Program WeaknessesProgram Weaknesses
Department unnecessarily has too many Department unnecessarily has too many cardholderscardholders
Reviewers responsible for too many Reviewers responsible for too many cardholderscardholders
Insufficient trainingInsufficient training Faltering Reviewer (very dangerous Faltering Reviewer (very dangerous
as this is the first line of defense)as this is the first line of defense) We must have proper mechanisms We must have proper mechanisms
installed to detect and halt fraudinstalled to detect and halt fraud
How Does Fraud Occur?How Does Fraud Occur?
Services paid for, but not received by Services paid for, but not received by the University (usually involves two the University (usually involves two individuals)individuals)
Personal purchases made, and Personal purchases made, and removed from institution’s property removed from institution’s property or shipped to another locationor shipped to another location
Personal purchases made in Personal purchases made in combination with authorized combination with authorized goods/servicesgoods/services
Consequences of FraudConsequences of Fraud
RestitutionRestitution Loss of Leave TimeLoss of Leave Time Suspension and/or Termination of Suspension and/or Termination of
EmploymentEmployment FinesFines Criminal ProsecutionCriminal Prosecution
Review, Review, ReviewReview, Review, Review
Reviewers are the University’s first line of Reviewers are the University’s first line of defense against purchasing card fraud.defense against purchasing card fraud.
Purchasing card fraud is often a symptom Purchasing card fraud is often a symptom of a bigger personnel issue.of a bigger personnel issue.
If you suspect purchasing card fraud, If you suspect purchasing card fraud, contact the Delegated Procurement contact the Delegated Procurement
Team Immediately.Team Immediately.
Contact InformationContact Information
*Send an email to *Send an email to [email protected] to to certify completion of reviewer training*certify completion of reviewer training*
Contact the Delegated Procurement Contact the Delegated Procurement TeamTeam
Voice MailVoice Mail (301) 405-5834(301) 405-5834FAX FAX (301) 314-1352(301) 314-1352EmailEmail [email protected]