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GREETING
Welcome to the Michigan State University Purchasing Card Program. This program has been designed to allow for the direct procurement of small dollar purchases by end users through the use of a credit card, eliminating the need for requisitions, petty cash, etc. Our program uses a MasterCard® product issued by JP Morgan Chase bank.
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OVERVIEW
Although the card has many built-in controls, there are certain steps that you, as the cardholder, must take to ensure the responsible use of University funds. You should first become familiar with both University expenditure policies and the National Association of Educational Procurement Ethics Guidelines - Exhibit A. Purchases made on the card must be in accordance with the established University expenditure policies and must be made in an ethical manner.
MSU’s MasterCard® purchasing card program uses both internal management controls and extensive reports to manage and audit the process to ensure that procedures are followed.
The card is a privilege granted to you by the University and it is expected that you will use it responsibly. The University will seek restitution for any inappropriate charges made to the card. Fraudulent or intentional misuse (including use of the card for personal purchases) will result in revocation of the card and/or possible criminal charges, including termination.
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PROCEDURE FOR OBTAINING A CARD
The card is available to faculty and staff (excluding on-call, temporary employees, students and graduate students). To become a cardholder, you must complete a Cardholder Application Form, attend a Cardholder Orientation Session and sign a Cardholder Agreement Form.
Application Form - (Exhibit B) the form can be downloaded by clicking on Exhibit B. The application requests certain personal data which allows the bank to identify you as the cardholder upon card activation or account inquiries. The Purchasing Card will in no way affect your personal credit as the card is a commercial account issued in the name of Michigan State University. The form requires three signatures: the cardholder, the Dean, Director or Chair and the Business Office. Unit Administrators who wish to have a card must have their applications signed by either the Associate Provost or an Assistant Vice President.
Cardholder Orientation Session -
All cardholders must attend an orientation before receiving their card(s). The Purchasing Card Coordinator will contact you to schedule training once your card is received.
Cardholder Agreement Form -
At the conclusion of the orientation session, you will be required to sign an agreement form stating that you understand the program policies and procedures and that the card is not to be used for personal use.
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GUIDELINES FOR CARD USE
The MSU Purchasing Card can be used with any merchant who accepts MasterCard®.
Each individual transaction must not exceed $2500 (including shipping/handling). Transactions at $2,500.01 and greater will be denied at the point of sale. It is not permissible to make multiple charges in the same day, or consecutive days, to the same merchant in order to facilitate a charge that exceeds $2500 (with the exception of the payment of conference registration fees where a cardholder needs to register multiple attendees for the same conference). All cards have a $2500 single purchase limit, this amount cannot be changed.
Each card has a monthly spending limit that has been set by you and/or your business office based on spending needs. All monthly spending limits are subject to final approval by Accounting, Purchasing and/or Contract and Grant Administration. To request an increase in your monthly spending limit, you must send a memo (no emails) signed by the Dean, Director or Chair to the Purchasing Card Coordinator requesting the change. The memo should include cardholder name, the MSU account number, last four digits of the card and the new monthly spending limit.
In addition to the expenditure policies outlined in the MSU Manual of Business Procedures, the following items are strictly prohibited from being purchased on the card:
- air conditioners
- alcohol (consumable or scientific)
- automobile service/repair
- bus lines - charters, tour buses
- cable, satellite or internet services
- carpeting, window treatments (i.e., draperies, venetian blinds, etc.)
- cash advances, travelers checks, wire transfers, money orders
- dehumidifiers/humidifiers
- drugs/narcotics (controlled or other)
- employment agencies/ temporary help services
- gas cylinders
- gasoline/fuel
- independent contractors and personal services
- individual memberships/ dues
- internet auction sites (i.e., ebay.com)
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- lab animals medical services/ fees
- motor freight carriers, trucking/ moving companies
- personal purchases
- plumbing/ electrical/ mechanical/ structural materials & services (materials are permissible for documented lab research projects)
- security and access (locks, lock changes, key pads, security systems, security service)
- radioactive material
- travel and entertainment including: airlines, auto rentals, bars, buses, cash advances, caterers, hotels and motels, limousines, restaurants, taxis, travelers checks, tolls and trains
- two-way radios
- wholesale or retail club memberships (i.e., Sam’s Club, etc.)
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Our federal tax identification number is embossed on the bottom line of the card (38-6005984). It is your responsibility as the "MSU Purchaser" to ensure that tax is not charged. In those cases where the vendor did not accept our tax exempt status at the time of purchase, please formally request the tax credit for those purchases that exceed $1,000. Contact the Controller’s Office if you need further assistance convincing a vendor of our tax exempt status beyond the Sales and Use Tax Exempt Status letter included as Exhibit H in this manual.
The U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) maintains a list of countries with which economic trade sanctions have been imposed. The sanctions pertain to importing and exporting goods and services to and from countries whose practices are inconsistent with U.S. foreign policy and national security. Current sanctioned countries are listed at http://www.treas.gov/offices/enforcement/ofac/programs/. Under no circumstances should a shipment or purchase be made to or from a country that appears on the sanctioned list, regardless of the funding source.
Federally funded contracts further restrict purchases from certain parties who are deemed "excluded" from receiving Federal contracts, subcontracts, etc. These individuals and/or businesses can be viewed at: http://www.epls.gov. Under no circumstances should purchases be made to these listed parties using a pcard tied to Federal funds.
Only the authorized cardholder may use the card. Delegation of authority is not permitted. Merchants require that the signature on the card match the signature on the receipt. Sharing your card with others increases the likelihood of misuse. You will be held responsible for all charges made against your card.
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GENERAL CARDHOLDER INSTRUCTIONS
Your MasterCard® may be used for phone-in orders, internet orders, pick-up or counter orders, and can be used with any merchant who accepts MasterCard®.
If the item you wish to purchase is available through University Stores stock, it is strongly recommended that you purchase the item through University Stores using your account number.
Remember to consult the Purchasing Department’s Contract page to help you determine the best source to use for your particular need.
You will be responsible for retaining receipts, packing slips, etc. for all purchasing card purchases. Receipts MUST be itemized. When placing an order over the phone, please remind the merchant that MSU is tax exempt (the University’s TIN number is printed on the face of the card) and that they should include an itemized receipt with the shipment. At the end of each billing cycle, all receipts pertaining to a particular statement must be attached to that statement and filed for audit. Please consult your business office as some departments require more extensive expenditure reviews. All purchases MUST have itemized back-up documentation supporting the expense as specified the MSU Expenditure Policies and Guidelines detailed in the Manual of Business Procedures. One suggestion is to keep a log of all of your purchasing card activity. This log would be for your use only and would prove helpful in reconciling your monthly statement. You will be required to maintain complete files of all receipts in accordance with current University retention policies.
For telephone and catalog orders, instruct the merchant to SHIP THE ITEMS DIRECTLY TO YOUR CAMPUS ADDRESS (your name should appear on the outside of the package). Credit card deliveries should not be made to University Stores. When asked for your billing address, use the address that appears on your Cardholder Statement of Account.
Faxing or e-mailing your credit card number is also not recommended. Many faxes do not reach their intended destinations, and you have no way of knowing who has received your faxed form. Most forms require the credit card number, expiration date, and signature of the cardholder, thus giving a person all the information needed to purchase items using your card. When faxing or emailing an order, i.e., conference registrations, we recommend including a statement in the billing area on the form, such as, "Once order form is received, please call (your name and number) for billing information." Remember to keep a copy of your order for auditing purposes.
You will be responsible for ensuring receipt of materials as well as any follow-up efforts required to resolve any delivery problems, discrepancies, damaged goods, billing problems or returns.
If you need to return an item, contact the merchant to find out what their return policy is. If they instruct you to ship the item back to them, use the MSU Transportation Service Request (TSR) Form (Exhibit D - MSU stock #1402820). If the merchant gives you a return authorization number or a name, be sure to reference this on the TSR Form. If the item is returned for credit, remember to watch for the credit to appear on your credit card statement. If the item is being returned due to merchant error (i.e., damaged item, wrong item received), the merchant should pay for return shipping and arrange to have the item picked up and returned to them.
If your charge is denied by a merchant, you must call, JP Morgan Chase Customer Service at (800) 316-6056 for an explanation.
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RECONCILIATION AND ACCOUNTING
The purchasing card billing cycle is from the 25th of the month through the 24th of the next month. Monthly billing statements will coincide with your monthly fund ledgers and must be reconciled within 60 days. You will receive a Cardholder Statement of Account (Exhibit E) shortly after the close of the billing cycle. Compare your receipts, packing slips and monthly transaction log with your statement. All purchases MUST have itemized back-up documentation supporting the expense. After the statement has been reconciled, the cardholder must sign the statement, it must then be reviewed, approved, and signed by someone administratively senior to the cardholder, or when authorized, by the unit's budget/business administrator. The unit's budget/business administrator can be authorized to sign credit card reconciliation statements on behalf of the unit, if done in writing by the dean, director, or chairperson. However, the delegate may not sign his/her own statement. Even though sound internal control and accounting procedures dictate that a cardholder can not be the final approver/reviewer of their own statement, University policy does allow unit administrators (dean, director, or chairperson, or assistant/associate dean, director, or chairperson) or above, to do so. (For further clarification, please call the Controller's Office at 517-355-5000).
The purchasing department does not receive or maintain duplicate copies of your receipts. For lost receipts, contact the merchant or request a copy of the sales draft from the bank. If you have placed an order, including an Internet order, you MUST have an itemized receipt for that purchase - or your card will be revoked. These receipts are the only way the University can document the manner in which its funds were spent.
Because receipts can vary in the terms of the amount of information they contain, it may not always be clear as to what the item(s) were that were purchased. If there is any chance that the receipt might be vague or the item purchased might be questionable in nature, be sure to clarify the nature of the purchase and/or indicate the business purpose of the item.
Internal Audit, Contract & Grant Administration, or the Purchasing Department may request backup documentation on a particular transaction or group of transactions. You must provide the information by the date requested or your card may be suspended. Additionally, department administrators can request that a card be suspended at any time by notifying a member of the pcard team.
If you need of a copy of a charge receipt (sales draft), use the Statement of Questioned Item Form (Exhibit F) to request one. There is a $5.00 per receipt fee for this service that will appear on your next billing statement.
Each purchasing card is associated with one MSU account number. Purchasing Card transactions will be reported as expenditures on your fund ledger under object code 083, description: Procard, with the exception of cell phone charges (which will appear under object code -041).
If the MSU account number that you have designated for your card should change or expire, it is your responsibility to inform the MSU Purchasing Card Coordinator, in writing, of the change. The memo should include the cardholder name, old account number as well as new account number and must be signed by someone who is authorized on the new account. Send the memo to the MSU Accounting Department, 360 Administration Building. Accounting will forward the approved memo to the Purchasing Department.
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Reallocation
If you wish to change the account and/or object code or split the expense between multiple account numbers, you can avoid processing a JVE by accessing your transactions and making the appropriate change(s) via the E+ Purchasing/Web Requisitioning system. Not all cardholders will be granted reallocation access. Each department may designate up to 3 people to perform these types of expense transfers. To gain access to this system, you must first be an authorized E+ user (http://webreq.msu.edu/). Once your account is established in E+, you must request access to the purchasing card reallocation program. The reallocation User’s Guide can be located at http://purchasing.msu.edu/PurCard/purcardReallocation.htm. All purchasing card reallocations must be completed by 5:00 p.m. on the business day following the billing cycle close. After 5:00 p.m., transactions are locked and a JVE will be required to make further changes.
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Disputes
There is a 60-day period in which you can file disputes with the bank. Disputes filed later than 60 days from the posting date of the cardholder statement may not be considered. Disputes should be discussed, first with the merchant, and should be referred to JP Morgan Chase only after attempts to resolve the matter with the merchant have failed. JP Morgan Chase will require you to fill out and fax, or mail, a dispute form along with any supporting documentation. The form, titled "Statement of Questioned Item" (Exhibit F), is enclosed. Please copy the form and use as needed.
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AUDITS
The MSU Internal Audit Department and/or Contract & Grant Administration will conduct periodic audits of each cardholder’s transaction file and monthly statements. Additionally, the MSU Purchasing Card Coordinator reviews the various activity reports to ensure that cardholders are adhering to MSU, MasterCard®, and bank policies and procedures. Questionable transactions will result in a letter to the cardholder requesting detailed information on specific purchases. If the activity still appears questionable after receiving the cardholder's explanation, a follow-up letter is sent to the cardholder and copied to the appropriate Dean, Director or Chairperson as well as Internal Audit. You must provide the information by the date requested or your card may be suspended. The University will seek restitution for any inappropriate charges made to the card. Fraudulent or intentional misuse (including the use of the card for personal purchases) will result in revocation of the card and/or possible criminal charges, including termination.
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Fiscal Misconduct
All administrators, faculty members, support staff, and other employees should promptly report any known or suspected fiscal misconduct by contacting the Director of Internal Audit at http://www.msu.edu/unit/intaudit/hotline.html or by phone (517-355-5036). The University has also established a toll-free hotline (1-800-763-0764) that can be used to anonymously report known or suspected misconduct.
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LOST OR STOLEN CARDS
If your MasterCard® is lost or stolen, it is your responsibility to notify JP Morgan Chase at (800) 848-2813 and the Purchasing Card Coordinator (517-355-0357 X121). Your card will be cancelled immediately, and a new card will be sent to the Purchasing Card Coordinator who will forward it to you via campus courier. If your card is stolen on campus property, you must also contact the Police and Public Safety Department at (517) 355-2221. Your department/account will be liable for any charges that may have occurred prior to the card being canceled.
| JP Morgan Chase: |
(800) 848-2813 (24 hours/day; 7 days/week)
(847) 488-4441 (Outside US, collect call) |
| Purchasing Card Team Members: |
(517) 355-0357, Ext. 121 or Ext. 122 |
| Police and Public Safety Department: |
(517) 355-2221 |
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CARD EXPIRATION AND EMPLOYMENT TERMINATION
You will receive a new card prior to the expiration date of your current card. Your current card is valid through the end of the expiration month. Once you have activated your new card by calling the toll-free number indicated on the card, be sure to cut up your old card before disposing of it. If, in the event, you do not receive a new card, please contact your business office.
Upon leaving the University and prior to your effective termination date, the cardholder is required to notify the MSU Purchasing Card Coordinator and Statement Approver, in writing, to cancel your purchasing card. You should then cut up the card and dispose of it. It is your responsibility to cancel the card. Do not leave your card behind with anyone to cancel for you. You are responsible for all purchases up to the point of cancellation.
The Statement Approver also has a shared responsibility to ensure that the Purchasing Card Coordinator has been notified and that the terminated employee’s purchasing card has been canceled. Upon notification of an employee’s termination from the University, the Purchasing Card Coordinator will file the notification with the original application, and verify receipt of the notification with the requester.
When transferring to a new MAU, notify the Purchasing Card Coordinator, in writing, of the change prior to the effective transfer date. Once in the new department the employee should submit a new Purchasing Card Application signed by his/her new Dean, Director or Chairperson. If the cardholder transfers to a new department under the same MAU, a memo must be sent to the Purchasing Card Coordinator indicating the new account number. In either case, all receipts for outstanding purchases must be turned over to the Statement Approver so the final statement can be reconciled. The cardholder will not be required to attend another orientation. When reconciling the employee’s final statement, the Statement Approver will attach the appropriate receipts, sign their name on the supervisor/manager signature line, and make a note indicating the cardholder’s last day of employment in that department for auditing purposes.
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Security
There are some simple steps you can take to ensure the security of your card. Do not loan your card to someone else. Only the authorized cardholder may use the card. Always know where your card is and review your statement for unauthorized charges immediately upon receipt.
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MSU PURCHASING CARD RESPONSIBILITIES
MSU Purchasing Card Responsibilities:
There are specific duties and responsibilities for the "Cardholder", "Statement Approver", and "Contact Person". These duties and responsibilities are as follows:
Card Holder:
- Ensure that the University resources are spent in a responsible and ethical manner.
- Never share the use of your card. Only the authorized cardholder may use the card.
- Be aware of the strictly prohibited items that are not to be purchased with the card.
- Never use the Purchasing Card for personal use.
- Immediately report a lost or stolen card.
- Obtain original itemized receipts for all purchases.
- Notify merchant MSU is tax exempt and provide tax ID number or Sales and Use Tax Exemption Certificate if requested by the merchant.
- Reconcile Cardholder Statement of Account within 60 days of posting date, attach receipts and sign the statement. The statement must then be reviewed, approved, and signed by someone administratively senior to the cardholder, or when authorized, by the unit’s Statement Approver. However, a Statement Approver may not provide the oversight approval for his/her own statement.
- Ensure receipt of materials and resolve any delivery problems, discrepancies, damaged goods, billing problems or returns with merchant.
- Submit a Statement of Questioned Item Form (Exhibit F) to the bank for disputes that cannot be resolved with the merchant.
- When transferring to a new MAU, notify the Purchasing Card Coordinator, in writing, of the change prior to the effective transfer date. Once in the new department the employee should submit a new Purchasing Card Application signed by his/her new Dean, Director or Chairperson. If the cardholder transfers to a new department under the same MAU, a memo must be sent to the Purchasing Card Coordinator indicating the new account number. In either case, all receipts for outstanding purchases should be turned over to the Statement Approver so your final statement can be reconciled.
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Statement Approver:
- Verify that the Purchasing Card Coordinator has been notified when a cardholder terminates the University or transfers to another unit on campus.
- It is the recommendation of both Internal Audit and the Purchasing Department that an appropriate separation of duties exist. However, if the cardholder is also the same person who receives the fund ledger, it is essential that a person senior to the cardholder review and sign the Cardholder Statement of Account on a timely basis each month.
- Memos to change the account number on a card must be signed by the Authorized Signer. Internal Audit requires verification of signatures for this type of change.
- Must be at least one level administratively senior to the cardholder, or have been delegated signature authority, in writing, by the Dean, Director or Chairperson. A Statement Approver may not provide the oversight approval for his/her own statement.
- Must review all transactions and receipts and verify that they are appropriate expenditures of University funds and are in compliance with policy.
- Will complete final statement reconciliation for employees whose last statement arrives after they have left their position (the cardholder will leave all outstanding receipts with the Statement Approver in this case).
- Is strongly encouraged to attend a cardholder orientation session in order to better understand the program and enforce compliance.
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Contact Person:
- Receives and distributes to the cardholder their monthly Cardholder Statement of Account and copy of the monthly cover letter.
- If aware that a cardholder has left the department or terminated with the University, verify with the Statement Approver that the Purchasing Card Coordinator has been notified.
- Advise the Purchasing Card Coordinator of any address changes for cardholders.
- Must attend cardholder orientation regardless of whether they are a cardholder or not.
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