Posting Date: Page 1 of 11 FIN & INFO Procurement Card Policies & Procedures

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1 Posting Date: Page 1 of 11 Section # Table of Contents 1.0 Purpose 2.0 Overview 3.0 Cardholder Eligibility 4.0 Establishment of Credit Limits 5.0 Methodology 6.0 Responsibilities 7.0 Application Procedure 8.0 Using the Procurement Card 9.0 Monthly Payment Procedure 10.0 Review Procedures 11.0 Appendix A: Required Documentation for Frequently Submitted Expenses 12.0 Appendix B: Appropriate Methods of Payments 13.0 Cross Reference 14.0 Developed By 15.0 Approved By 16.0 Posting Dates 1.0 Purpose The Procurement Card is designed to streamline the Hamilton Health Science purchasing and payment processes for high volume and low dollar value goods, without compromising its best practices or circumventing existing internal controls. Use of the card as outlined will improve processing efficiencies across the organization. Important benefits of the Procurement Card include: Streamlined, cost-effective purchasing process Improved vendor relations through prompt payment Discount opportunities through early payment Reduced invoice handling and data input 1.1 The Procurement Card represents an alternative form of payment to streamline processes and will not be used to purchase goods or services which are not approved under the Corporate Policies and Procedures. All purchasing activity must comply with Corporate Policy and follow the Signing Authority Lookup Tool guidelines for approval. The cards are not for use where Value Improvement Team (VIT) agreements govern HHS purchases, or where the item or a suitable alternate is stocked in inventory. 1.2 The Procurement Cards issued to departments for the procurement and payment of goods outlined above, are not intended for travel or for business related expenses normally processed through the employee expense reimbursement process. Merchant exclusion codes have been established with US BANK to ensure these 1

2 Posting Date: Page 2 of 11 types of transactions are not processed. Procurement Cards issued to HHS Executive members may be used for payment of expenses incurred during the course of business activities, and for related travel and entertainment. It is expected that all reasonable efforts are made to follow HHS procurement policies and not to use the Procurement Card to circumvent the controls those policies provide. 2.0 Overview All cards will be issued within the Finance Department upon approval by the Vice President of Finance & Chief Financial Officer (VP Finance & CFO). A card may be revoked at any time by the cardholder s department Manager/Director/Vice President or by the VP of Finance & CFO. 3.0 Cardholder Eligibility Only those individuals specifically authorized may participate in the program. Contracted employees, students, Foundation employees and non-employees will not be eligible for the Procurement Card. In addition, no one other than the cardholder is authorized to use the card. 4.0 Establishment of Credit Limits Cardholder transaction and monthly credit limits will be assessed on an individual basis and will be determined by the following criteria: 5.0 Methodology the requirements of the specific cost center the recommendations of the Manager/Director/Vice President HHS Policies & Procedures US BANK will electronically forward a monthly summary of all Procurement Card purchases to the Accounts Payable Department for payment. The monthly processing steps can be summarized as follows: 5.1) Authorized cardholders make purchases in the course of business activities using the Procurement Card. Any subsequent proof of delivery and receipts must be retained by the cardholder. 2

3 Posting Date: Page 3 of ) The cardholder will receive a monthly activity statement for reconciliation and approval by the 15 th day of the month. Charges must be reviewed, discrepancies resolved, and all supporting receipts/packing slips are to be attached. This package will be submitted to the individual s manager for approval. The deadline for the approved statement to be submitted and received by the Accounts Payable Analyst will be the 1st day of the subsequent month. Any charges not supported by receipts will not be processed for payment and will become the responsibility of the cardholder unless they are approved exceptions (see 6.1.9). 5.3) Accounts Payable will receive an electronic statement monthly. Payment will be made from this statement to ensure payment due dates are met. Any disputed amounts will be adjusted against the current balance, and the details forwarded to the department manager for resolution. 5.4) Accounts Payable will use the statements and the reconciliation provided by the cardholder to charge the appropriate cost centers and general ledger accounts. 5.5) Detailed statements are also generated by the Bank and will be provided to the Department Director. Each Director will be responsible for all Procurement Card purchases and payments made within their department. It is the Department s responsibility to ensure that these comply with the HHS Purchasing Policies and Procedures. 6.0 Responsibilities 6.1) Cardholder Responsibility The Cardholder will sign the Cardholder acknowledgment to verify that they have read and understand the policies governing the proper use of the US BANK Procurement Card The cardholder will sign for the Procurement Card immediately upon receipt from the Manager/Director/Vice President. This will apply to the re-issue of any lost, stolen or damaged Procurement Cards The Procurement Card is user-specific. Delegation of authority is not permitted in making transactions. The Cardholder is responsible for ensuring the proper use of the card The Procurement Card will not be used to obtain cash advances The Procurement Card is not to be used to purchase goods or services which are not approved under the Corporate Policies and Procedures. 3

4 Posting Date: Page 4 of The Procurement Card cannot be used to obtain merchandise for personal use. In addition, the Procurement Card will not be used with Government licensing bodies or Financial institutions. The purchase of equipment requiring warranty registration or tracking for potential recall purposes is forbidden The Cardholder is responsible for verifying the accuracy of the monthly statements All supporting receipts, invoices, packing slips and receiving documentation must be attached to the statement for approval. Photocopies are not acceptable. Visa receipts in themselves do not constitute adequate supporting documentation. Non-compliance will result in non-payment and charges will become the responsibility of the Cardholder In the event that supporting documentation is not attached to the monthly statement an Approved Exception Form will need to be filled out by the relevant party as described below: Missing supporting documentation for: Purchases 0 < $100 Required approval for Approved Exception Form : Appropriate Manager/Director/VP Purchases 0 > $100 VP of Finance & CFO The A/P Analyst will communicate the need for an Approved Exception Form to be filled out after assessing the backup submitted with each submission. If an Approved Exception Form is not submitted for purchases without appropriate supporting documentation this will result in non-compliance and the charges will become the responsibility of the Cardholder. See Appendix A for details of the required supporting documentation needed for frequently submitted expenses The Cardholder will be responsible for ensuring that the appropriate General Ledger account coding is applied to all purchases following the guidelines issued by the Finance Department The Cardholder will take appropriate and timely action required to identify and correct any errors. US BANK must be notified of statement discrepancies within 4

5 Posting Date: Page 5 of days of the statement date. The Cardholder will also notify the AP Analyst of any errors, corrections or adjustments made to their account All returns will be handled directly between the Cardholder and the Vendor. Subsequent credits must be applied to the Procurement Card. The Cardholder will not accept a cash refund for the return of any goods. If a Vendor is unable to process a credit at any time, the Cardholder will contact the AP Analyst. It is the Cardholder s responsibility to ensure that all credits are accurately reflected on the statement The Cardholder will submit their monthly statements, along with all supporting documentation to their Manager subsequent to the receipt of monthly activity statement from AP Analyst (15 th day of the month). If a statement has not been received, the Cardholder and the appropriate Manager/Director will be notified by the AP Analyst. Failure to forward the approved statements within 7 working days of this notification may result in deactivation of the card Disputed charges are items charged to the Cardholder s account that do not accurately reflect transactions made by the Cardholder. These may include, but are not limited to bank errors (wrong amount, wrong account charged, or duplicate charges), or Vendor errors (incorrect price, quantity errors, returned goods, etc.) The Cardholder will report disputed items to the Bank, and to the AP Analyst. Vendor errors will be resolved between the Cardholder and the Vendor directly. Vendor disputes, which cannot be successfully resolved by the Cardholder, will be forwarded to the AP Analyst. The Coordinator will engage the Bank s assistance in obtaining documentation from the Vendor s financial institution to resolve the dispute Bank errors will be resolved by the AP Analyst The Cardholder will immediately notify US BANK if the card is lost or stolen. A card lost or stolen on Hospital property will be reported to Security. The Cardholder will also notify the AP Analyst. The card will immediately be canceled. Application for a replacement card will be submitted by the AP Analyst Lost or stolen cards can be reported to the Bank 24 hours a day by calling HHS is liable for charges, to a maximum of $50.00 until the Bank has been notified. 5

6 Posting Date: Page 6 of Any changes to the cardholder s name, address, transaction limits, etc. are made through the AP Analyst using the appropriate form and will be submitted by the Manager/Director The Cardholder will surrender the card to their Manager/Director/Vice President upon request. 6.2 Management s Responsibility The Department Manager/Director/Vice President will provide the AP Analyst with the names of those employees eligible to be assigned a Procurement Card. The Department Manager/Director/Vice President will approve all applications submitted to the AP Analyst, and ensure that the Cost Centre is accurately reflected The Department Manager/Director will be responsible for distributing the Procurement Cards to designated employees. They will ensure that the cards are signed for, and that the Employee Acknowledgment form has been completed The Department Manager/Director will provide the AP Analyst with an estimate of the monthly credit limit for each Procurement card issued, as appropriate to ensure effective use of the card The manager will notify the AP Analyst with any changes or deletions to the authorities delegated. This will include the transfer of any employee to another Department or Cost Centre. A transfer will result in card cancellation. The new Department Manager/Director/Vice President will be responsible for notifying the AP Analyst if a new card is to be issued The manager will review the allocation of costs incurred using the Procurement Card, and ensure that these comply with HHS Policies and Procedures. Where necessary, any journal entries to re-allocate costs will be the responsibility of the department. Statements missing supporting documentation will be returned to the Cardholder for resolution prior to submission to the AP Analyst The manager will notify the AP Analyst immediately of any misuse of the card and will take action necessary to prevent further abuse. 6.3 Accounts Payable s Responsibility Accounts Payable will be responsible for processing timely payments from the US BANK statements provided electronically. 6

7 Posting Date: Page 7 of Accounts Payable will use the credit card statements and/or data provided to charge the appropriate cost centers Accounts Payable will be responsible for reviewing Procurement Card transactions to ensure compliance with HHS Policies and Procedures. 6.4 Accounts Payable Analyst s Responsibility The AP Analyst will be responsible for maintaining a list of authorized Cardholders. The Coordinator will forward new Procurement Cards to the Manager/Director for distribution to eligible employees. The Coordinator will also be responsible for assisting in the resolution of problems, and administering the overall program The AP Analyst will communicate directly with US BANK as related to the Procurement Card Program The AP Analyst will be responsible for submitting approved applications, notification of changes and terminations to US BANK The AP Analyst will ensure that all lost or stolen cards, or those revoked by a Manager/Director/Vice President are reported to the Bank immediately The AP Analyst will ensure that renewal cards are processed and received on a timely basis The AP Analyst will be responsible for the posting of expenses to the costs centers, as outlined in the Guidelines The AP Analyst will ensure that disputed items are resolved on a timely basis, within the guidelines specified by the Bank, and for ensuring that applicable credits are reflected on the statement The AP Analyst will ensure that the submitted statements are securely stored with all supporting documentation for the period specified by the Tax Authority The AP Analyst will assist with the continual rollout, maintenance and enhancement of the program. 7.0 Application Procedure 7.1 Upon recommendation by a Manager/Director/Vice President, individuals wishing to apply for a Procurement card will complete the application form, available on- 7

8 Posting Date: Page 8 of 11 line and submit it to their appropriate Manager/Director/Vice President. The Manager/Director will forward the completed form to Finance for approval. The application must be completed in its entirety and submitted to the AP Analyst who will forward the application to the VP of Finance & CFO for approval. 7.2 The approved applications will then be forwarded by the VP of Finance & CFO to the AP Analyst for processing. 7.3 All cards must be obtained from the AP Analyst and must be signed upon receipt. The Cardholder will be required to sign for the card. The Employee Procurement Card Agreement must also be completed acknowledging the cardholder s agreement that the card will be used within the guidelines and policies of. The card is not transferable. 8.0 Using the Procurement Card 8.1 The Procurement Card Program has been introduced to streamline the purchasing process and facilitate users. 8.2 The Procurement Card is accepted by many of the suppliers conducts business with. Those suppliers not presently accepting credit card payments will be identified with US BANK. 8.3 Certain types of merchants have been excluded from the list of available credit card suppliers. Details are provided with the individual Cardholder package. If the card is presented to an excluded merchant, the transaction will be declined. If the decline is questionable, the Cardholder should contact the Credit Card Customer Service number indicated to determine if the transaction was declined due to merchant exclusion, or if the monthly limit has been exceeded. In the event the dollar limit has been exceeded, the Cardholder should contact the AP Analyst. Where necessary, the dollar limits set will be reviewed by the Department Manager/Director, the Purchasing Department and the VP of Finance & CFO to ensure effective use of the card. 9.0 Monthly Payment Procedure 9.1 US BANK will forward a monthly statement directly to the Cardholder for review, approval and processing. A consolidated summary, along with the cardholder statements will also be forwarded to Accounts Payable for payment. Accounts Payable will make one payment to US BANK on behalf of all Cardholders. 9.2 The Cardholder must match all invoices and packing slips to the statement. The on-line Cardholder statement must be coded with the appropriate General Ledger Account for posting to the General Ledger. If an error is discovered on 8

9 Posting Date: Page 9 of 11 the statement, the Cardholder should telephone the associated vendor to investigate. If both the Cardholder and the vendor cannot determine the source of the discrepancy, the Cardholder will notify the Coordinator. The Cardholder must submit the monthly statement along with the corresponding receipts/packing slips to the Department Manager responsible for approving purchases and payments. Charges, for which receipts are not attached, will not be processed by Accounts Payable and will become the responsibility of the Cardholder. The Manager will approve the statement and forward it to the AP Analyst. The Coordinator will retain records for seven years. 9.3 The Cardholder is responsible for verifying that all items included on the monthly statement are accurately recorded. Disputed charges must be resolved before the next statement date. The Cardholder will be expected to have their statements approved and forwarded to Accounts Payable for processing before the deadline of the 1st day of the following month.. Failure to comply with this requirement could result in late payment charges, which will be charged back to the department. 9.4 In accordance with HHS Policies and Procedures, all Cardholder statements must be approved by the Director/Manager before they can be processed by Accounts Payable. It is the Director/Manager s responsibility to ensure all purchases comply with HHS Purchasing Policies and Procedures Review Procedures On-going reviews will be conducted to ensure compliance with HHS Policies and Procedures. See Appendix B for details on Procurement Card purchasing compliance. Internal Audit performs an annual review of all expenditures put through on the Procurement Cards. In addition, the AP Analyst and the AP Coordinator analyze approved exceptions and late submissions on a monthly basis. These reviews may include, but will not be limited to the following: Comparison of cardholder supplied information to consolidated data Explanations of discrepancies between cardholder data and consolidated data Review of cardholder receipts and record to confirm compliance with policies and procedures established for the Procurement Card Program Analysis of card use as related to vendor selection, dollar volume, and monthly activities, which support requests for increased spending limits Analysis of cost allocations to ensure accurate posting to the General Ledger Verification of signatures, where applicable 9

10 Posting Date: Page 10 of Appendix A: Required Documentation For Frequently Submitted Expenses. The following Appendix details frequently submitted expenses which have historically not been accompanied with the appropriate supporting documentation. The following table details required documentation to be submitted with these kinds of expenses. Type of Purchase Gas Parking Vouchers Air Flight Dinners Hotels Online purchases Car Maintenance Courses Membership Fees Subscriptions Train Travel Required Documentation Original detailed receipt. (summary of receipt not Print out of receipt Original Boarding Passes (flight itineraries do not constitute adequate documentation) Original detailed receipt. (summary of receipt not Original detailed receipt. (summary of receipt not Print out of detailed receipt (summary of receipt is not Original detailed receipt. (i.e. summary of receipt not Original detailed receipt. (summary of receipt not Original detailed receipt. (summary of receipt not Yearly pre-payment of subscription receipt Original Boarding Passes (Train itineraries do not constitute adequate documentation) 10

11 Posting Date: Page 11 of Appendix B: Appropriate Methods of Payment The following Appendix details unique purchasing situations as well as a recommended avenue for reimbursement. The following table is consistent with the Signing Authorization Policy. Type of Purchase P-Card Purchase Order Cheque Expense requisition Reimbursement Gifts N/A N/A N/A Applicable Courses for Staff N/A N/A Applicable N/A Flights for Dept. N/A N/A Applicable Applicable Staff Professional Fees N/A N/A N/A Applicable 13.0 Cross Reference FIN_&_INFO_-_P-Card Submission Form_-_April 2011 FIN & INFO - FORM - P-Card Approved Exception Form FIN & INFO Travel & Expense Reimbursement Policy - Effective April 1, Developed By Financial Services 15.0 Approved By Vice President of Finance & CFO 16.0 Posting Dates Initial Posting Date: Review/Revision Posting Date: Keyword Assignment FIN & INFO; Finance; Accounts Payable; Payment Processing; Procurement Card, P Card END OF DOCUMENT For internal use only at HHS. Persons reviewing a hard copy of this document should refer to the electronic version posted in the Policy Library to ensure this copy is current. 11