Policies and ProceduresMMAATTEERRIIAALLSS MMAANNAAGGEEMMEENNTT

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I. PURPOSE AND SCOPE

II. APPLICATION

III. GENERAL PRINCIPLES

IV. RESPONSIBILITY

V. PROCEDURES

VI. REPORTING REQUIREMENTS

VII. NON-COMPLIANCE

VIII. CONTACT INFORMATION

AUTHORITY: RESPONSIBILITY: EFFECTIVE DATE: RELATED POLICIES:

Director, Financial Services Manager, Materials Management January 1, 2006 Purchasing Policy and Procedure Manual

University of Lethbridge: Procurement Card Policy 2/9

I. PURPOSE AND SCOPE The purpose of the Procurement Card is to provide a convenient method of procuring and paying for low value goods and services.

II. APPLICATION It is University policy to use Procurement Cards (“PCards”) for department purchases and to pay for goods and services where it is efficient and economical to do so, within the guidelines of the current Purchasing Policy and Procedure Manual.

III. GENERAL PRINCIPLES 1. PCard holders are responsible for any charge card usage. 2. A Department Head or appropriate designate must authorize and control the issuance of PCards to individuals within each department. Accordingly, PCard applications require the approval of the Department Head or appropriate designate. Click here for PCard Application Form. 3. The use of PCards is subject to the following restrictions:

a. Only the person whose name appears on the card may use it b. The card must only be used to purchase goods and services required for

University business purposes c. The card must be used within the limitations established by the University d. The card is not to be used for the following:

i. Personal or private use and cash advances (a PIN will not be issued) ii. Splitting purchases to circumvent card limits iii. Temporary help or contracts with individuals for services (a Payroll

Authorization Form (PAF) is required) iv. Goods and services provided through University Departments e.g.

Bookstore, Printing or Physical Plant work orders (an internal requisition or journal voucher is required)

v. Goods available on Direct Order Contracts e.g. Corporate Express (authorized individuals may order from Corporate Express on-line)

vi. Purchases to be claimed against Professional Development funds vii. Travel and related expenses including: airfare, car rental, fuel,

parking, transportation of any kind, meals, hotels, registrations viii. Entertainment, alcoholic beverages and food ix. Radioactive material (Materials Management requisitions will be

processed only after receiving approval from the Radiation Safety Committee)

x. Hazardous material xi. Laboratory and research animals xii. Maintenance contracts e.g. cell phones, printer maintenance,

photocopier maintenance, etc.

University of Lethbridge: Procurement Card Policy 3/9

xiii. Leasing of equipment or extended rentals (exceeding 30 days) xiv. Capital purchases valued over $1000 including taxes e.g. computers,

office equipment, scientific equipment, furnishings, etc.

For items vi through viii above, submit a claim for personal reimbursement. Items ix through xiv above are to be processed through Materials Management on a requisition form.

4. Each Cardholder is responsible for familiarizing him or herself and keeping up-to-date with the policies, procedures and restrictions regarding the use of the PCard. 5. An initial training session for new Cardholders as well as ongoing assistance and advice will be provided by Materials Management upon request. 6. New Cardholders will be informed of and acknowledge the responsibilities and obligations associated with the use of the PCard. An "Employee Acknowledgement Form" must be signed at the time of issuance and on an annual basis to confirm the Cardholder's agreement to the terms and conditions of the PCard. The signed Employee Acknowledgement Form must be returned to Materials Management within 10 days of receipt or use of the PCard will be suspended. 7. The Cardholder is liable for any unauthorized use of the PCard until notification of loss or theft has been reported. Lost or stolen cards must be reported to both Materials Management and the Bank of Montreal Purchasing Card Customer Service. The Bank can be notified 24 hours a day, seven days a week at 1-800-361-3361. 8. The University's high ethical standards must be maintained by the Cardholder. The Cardholder must in no way personally benefit from any purchases made on behalf of the University. Caution must be exercised in dealing with businesses owned by friends or relatives or favoring a particular vendor without valid reasons.

IV. RESPONSIBILITY 1. The Cardholder is the individual whose name appears on the PCard issued on the approval of the Department Head or appropriate designate. The Cardholder is responsible for:

a. Any charge card use b. Obtaining all supporting documentation and attaching same to the

MasterCard Transaction log. The Cardholder must make a reasonable effort to obtain any missing receipts.

c. Reconciling supporting documentation (defined in section VI Reporting Requirements) to Purchasing Card Statement within three days of receipt

University of Lethbridge: Procurement Card Policy 4/9

d. Subject to departmental requirements, providing the reconciled

Purchasing Card Statement, MasterCard Transaction Log and supporting documentation to the Department Head or appropriate designate for review and approval

e. Forwarding all documentation to Financial Services prior to the 15th of the month following the statement date

f. Notifying Bank of Montreal Purchasing Card Customer Service of disputed items

g. Ensuring disputed items are credited on the next statement h. Reporting a lost or stolen PCard to Bank of Montreal Purchasing Card

Customer Service i. Returning the PCard to the Department Head upon termination of

employment j. Providing a signed “Employee Acknowledgement Form” to Materials

Management annually

2. The Department Head or appropriate designate is the Chair, Dean, Director, Supervisor, or Financial Officer for the department and is responsible for:

a. Reviewing and approving the monthly MasterCard Transaction Log in accordance with the requirements for approval established by the Department

b. Ensuring supporting documentation (defined in section VI Reporting Requirements) for each transaction is supplied with the MasterCard Transaction Log

c. Authorizing and controlling the issuance of PCards to individuals within the department

d. Returning the PCard to Materials Management upon termination of employment of the Cardholder

3. Materials Management coordinates the procurement of goods and services for University faculties and departments. Materials Management is responsible for:

a. Maintaining the Purchasing Card Program b. Obtaining a signed “Employee Acknowledgement” form confirming

agreement to terms and conditions when the PCard is issued to an individual and on an annual basis

c. Monitoring use of PCards for adherence to University policy d. Providing an initial training session and ongoing assistance e. Assisting with supplier selection on request f. Requesting a replacement card when a PCard has been lost or stoleng. Review annual credit limits to determine if an adjustment to the approved spending limits is required (increase / decrease)

University of Lethbridge: Procurement Card Policy 5/9

4. Bank of Montreal Purchasing Card Customer Service administers the MasterCard Purchasing Card Program and is responsible for:

a. Cancelling lost or stolen PCards b. Replacing lost or stolen PCards c. Providing duplicate documentation upon request

5. Financial Services is responsible for:

a. Receiving documentation forwarded to Financial Services b. Entering the transactions into the Banner Finance System c. Retaining documentation as required for audit purposes

Financial Services is not responsible for monitoring compliance with any departmental requirement for approval of Cardholders’ purchases.

6. The Merchant supplying the goods or services is responsible for:

a. Addressing disputed charges on the Purchasing Card Statement b. Providing supporting documentation for the purchase c. Delivering purchases promptly d. Issuing credits for goods returned or incorrect invoices

V. PROCEDURES The PCard may be used within the spending limits as specified for each individual Cardholder. Purchases made outside Canada will be converted to Canadian funds by the Bank of Montreal at a rate at least as favorable as the Interbank rate on the day the transaction is posted to the PCard account. 1. Types of Transactions There are four types of transactions where the PCard may be used. In all cases, a MasterCard Transaction Log must be completed for reconciliation purposes.

a. In Person

b. Mail

Where goods are ordered by mail, the “Ship To” address should include: i. Cardholder’s name ii. Department name iii. Last four digits of card number, to be used as the purchase order

number which will alert Receiving that there is no purchase order

University of Lethbridge: Procurement Card Policy 6/9

c. Telephone/fax When placing orders by telephone or fax, follow these guidelines:

i. Identify yourself ii. Provide catalogue or part number, quantity and description of items

required iii. Obtain price and availability iv. Provide complete “Ship To” address as defined for purchases by mail

in (b) above v. Provide shipping method if we are responsible for freight charges for

out of city orders: under 100 lbs., goods should be sent via Purolator Ground

Courier Collect over 100 lbs., vendor's recommendation or with assistance

from Materials Management vi. Provide PCard number, your name as it appears on card, and the

expiry date vii. Obtain your contact's full name for follow-up if a problem should arise

If the goods are FOB origin - determine if Transit Insurance is required. Information on Transit Insurance can be found under section 4.2 of the Purchasing Policy and Procedure Manual and at the end of this section.

d. Internet Purchases When placing orders over the Internet, follow these guidelines:

i. Follow the same procedures as for telephone/fax orders ii. Print a copy of the online confirmation of the purchase iii. If the goods are FOB origin - determine if Transit Insurance is

required. Information can be found under Section 4.2 of the Purchasing Policy and Procedure Manual and at the end of this section.

iv. Where possible deal only with a reputable vendor that has a secure site, indicated by a web address beginning with https:// (versus http://).

2. International Orders (U.S. or other foreign countries) To ensure prompt delivery of your purchases when placing international orders, the commercial invoice must be visible on the outside of the package with the following information:

a. Shipping date b. Currency of settlement c. Complete description of goods d. Country of origin of goods

University of Lethbridge: Procurement Card Policy 7/9

This information is a mandatory requirement for customs clearance and the expedition of your purchases. Any missing information will result in delays. Ship To: University of Lethbridge 4401 University Drive Lethbridge, AB T1K 3M4 3. Transit Insurance Often the cost of freight and transit insurance is negotiated into the purchase price of goods. In such a case, the goods are considered to be “F.O.B. Destination” (Freight on Board Destination). This means that the merchant owns the goods and is responsible for freight and insurance costs until they arrive at the University. There are occasions, however, where the purchase price of goods is negotiated as “F.O.B. Origin” (Freight on Board Origin). This means that the University owns the goods in transit and must pay freight and insurance costs. In this case, it is important that the Cardholder understands the following:

a. The University of Lethbridge Self-Insurance Program (http://www.uleth.ca/ins/Documents/self.pdf) provides transit insurance coverage for all goods, but recovery for a loss is subject to a deductible of $2,500.

b. If the Department does not wish to assume responsibility for the $2,500

deductible under the Self-Insurance Program, transit insurance should be purchased up to the value of the goods or $2,500, whichever is less. In the event of a large transit loss, the transit insurance will cover the first $2,500 and the University’s Self-Insurance Program will cover the remainder of the loss.

VI. REPORTING REQUIREMENTS

1. Transaction Log Documentation supporting purchases made with the PCard must be attached to a MasterCard Transaction Log for audit trail purposes and to facilitate reconciliation and account verification. Click here for the On-Line MasterCard Transaction Log. The transaction log must include the following information:

a. Cardholder’s name b. Statement date For each transaction:

University of Lethbridge: Procurement Card Policy 8/9

c. Name of merchant d. Reason for purchase e. FOAPAL f. Purchase amount before GST g. GST amount h. Total purchase amount

All charges on the Purchasing Card Statement must be included on the MasterCard Transaction Log. Cardholders may not use the card for personal purchases through reimbursement to the University. 2. Supporting Documentation Attach original supporting documentation detailing the transaction, including the name of the vendor, a description of the goods or services, the purchase amount and the GST amount. Examples include a detailed cash register receipt, invoice, credit card receipt with an item description, packing slip if it includes dollar amounts or printed on-line order document.

3. Statement Reconciliation

a. “Your Purchasing Card Statement” will be issued on or about the 29th of each month. Statements can also be viewed on-line; contact Materials Management for access to this service.

Reconcile your supporting documentation for all expenditures made using the PCard to the monthly statement immediately after the statement is received. If required by your Department Head, forward your statement complete with MasterCard Transaction Log and supporting documentation to your Department Head or appropriate designate for review and approval within three days of receipt.

b. For timely processing, “Your Purchasing Card Statement”, the MasterCard

Transaction Log and all supporting documentation must be reconciled and submitted to Financial Services prior to the 15th of the month following the statement date.

For auditing purposes it is imperative that all receipts be attached to the MasterCard Transaction Log. It is the responsibility of the Cardholder to ensure that supporting documentation for each transaction is supplied with the reconciliation. Disputed items, which are transactions on the monthly statement that do not accurately reflect the purchases made by the Cardholder, such as an incorrect amount or account number, multiple postings, etc., should be reported immediately by the Cardholder to the Bank of Montreal Purchasing Card Customer Service for removal from the statement until resolved.

University of Lethbridge: Procurement Card Policy 9/9

Customer Service can be reached at 1-800-263-2263, 24 hours a day, seven days a week. Expenditures and amounts cannot be deleted or modified on the Purchasing Card Statement. The University will pay the statement balance including items being disputed, however the Cardholder must ensure disputed items are credited on the next statement. Note that problems with merchants, such as late delivery, are not considered disputed items and must be settled directly with the merchant.

Note: Goods may not be returned for cash.

VII. NON-COMPLIANCE

The Purchasing Card Program is designed to provide a convenient method of procuring and paying for low value goods and services. Non-compliance with any of the conditions stated may result in cancellation of PCard privileges.

VIII. CONTACT INFORMATION Questions regarding the Procurement Card policy and procedures can be directed to: Materials ManagementParkway Service ComplexUniversity of Lethbridge Lethbridge AB T1K 3M4 Canada Tel: (403) 329-2411 Fax: (403) 329-2080