Section 14 PCard Usage (Revised May, 2017)

Section 14 PCard Usage (Revised May, 2017) This document establishes the Company s policies governing the use of the Goodman Purchasing Card and the procedures for the following areas: Purchasing Limits Purchases Allowed Purchases Prohibited Security Out-of-Pocket or Cash Expenses Supporting Documentation Using the PCard Returns Statement of Accounts and Reconciliation Records Retention Lost or stolen PCards New cards and card changes Unauthorized usage Termination clause Card suspension and reinstatement There are numerous benefits of using the PCard for simplifying and reducing the costs of purchasing and payment, including: allowing authorized employees to pay for business related expenses, pre-populated spending activity reports, electronic supervisor approval, automation of out-of-pocket or cash reimbursement items, automation of general ledger coding, ability to review and analyze spending, reducing the number of invoices processed by the Accounts Payable group, and only one monthly invoice is paid to Capital One versus handling a large volume of lowdollar transactions. The PCard is the property of Capital One. Goodman is liable for all authorized charges on the PCard and the Cardholder is responsible for providing adequate support for all purchases made with the PCard. The use of the PCard is considered a privilege. Failure to comply with the timely completion of expense reporting will result in suspension of use of the credit card. Purchasing Cards are referred to throughout this policy as the PCard. This administrative procedure applies to all employees of Goodman Global, Inc. employees and its subsidiaries. All PCards shall be governed by this procedure. SUMMARY The following are some of the key points concerning the fundamentals of the PCard Program: The Goodman PCard is a Capital One MasterCard Corporate Credit card used by Goodman employees to pay for all business-related travel and entertainment expenses, purchase maintenance supply and operating ( MRO ) items and purchase office or other administrative related items up to authorized monthly and transaction limits (including sales tax, shipping and handling charges). Goodman retains the right to cancel a Purchasing Cardholder s PCard privileges for misuse or noncompliance. Failure to comply with this Policy may result in either revocation of PCard privileges or other corrective action, up to and including termination. DEFINITIONS Approving Manager Usually the supervisor of the Purchasing Cardholder. Billing Cycle End Date The monthly cycle end date for posting and eventual payment of PCard activity. This is also when the Purchasing Cardholders should begin their activity reconciliation. Goodman s Billing Cycle End Date is the 27 th day of the month. PCard transactions will normally be available in Concur for reconciliation within 2-3 days after the Cycle End date. Concur Expense Tool is a web based software system used to administer the PCard program. This system will be used by the PCard Administrator for overall program administration, the Purchasing Cardholder for on-line review, reconciliation of Pcard transactions, submitting OOP for approval, 1

and by the Approving Manager for electronic approvals. Employee - An individual employed directly by Goodman or, with the approval of the Company Officer responsible for the approval/usage of PCards Daikin Industries, LTD or Group Company employee on assignment with Goodman and transacting business on behalf of Goodman. Out-of-Pocket (OOP) Expenses Reimbursable expenses that the employee or Purchasing Cardholder incurs that could not be procured using the PCard (e.g. cash expenses or mileage reimbursement). These expenses are submitted electronically via the Concur system for approval and eventual payment. Purchasing Card (PCard) the PCard is a MasterCard credit card issued by Capital One for purchases of goods and services necessary for conducting Company business. The PCard will be issued to an individual employee. The PCard is for purchases by the designated employee and potentially those individuals who directly report to them only. Authority under the PCard is not to be assigned to any other individual. PCard Administrator The individual(s) designated at Goodman s corporate office, to act as a point of contact between Purchasing Cardholders and Capital One for information, general oversight and monitoring of the PCard Program. Purchasing Cardholders Those individuals who have been designated by Goodman and the PCard Administrator to be issued a PCard in their name to be used under the procedures contained herein. Statement of Account Summary of the Purchasing Cardholders monthly activity. At the Billing Cycle End Date, the Purchasing Cardholder will be notified via e-mail to access Concur expense tool to review their activity for the month. The Statement of Account serves as the basis for reconciliation of charges and receipts by the Purchasing Cardholder. The Statement of Account can only be accessed after the Bill Cycle End date, which is after the 27th day; cardholders can view their online statement with current charges at www.commercialcardconnect.com RESPONSIBILITIES PCard Administrator is responsible for the following: Coordinating program administration with Goodman Corporate management. Maintaining a direct relationship with Capital One. Keeping a current list of Purchasing Cardholders, card numbers, card limits, and card history. Reviewing applications for completeness, including approval from employee s manager, and controller (where applicable) and obtaining written or email approval from VP- Corporate Controller/or GSD Finance Director prior to card issuance. Assigning spending limits consistent with like-card holders. Reconciling PCard activity to monthly summary invoices from MasterCard. Assuring integrity of the Concur system and for identifying the possible misuse and abuse of the cards. Ensuring the transactions are properly interfaced with the accounting system(s). Reviewing compliance with the Statement of Account reconciliation process. Coordinating training on PCard usage and purchasing policies and procedures. Cancelling cards for terminated employees immediately upon receipt of the termination employee listing report Canceling and suspending cards as requested by purchasing cardholders, approving managers, or other Company officers. Answering questions, resolving issues and administering the program. Providing transaction analysis reports to management. On an annual basis, reviewing spending limits VP-Corporate Controller/Treasurer is responsible for the following: Establishing guidelines and criteria for transaction and cumulative dollar limits for PCards. Treasury is responsible for the following: Providing payment to Capital One for all PCard activity. 2

Purchasing Cardholder: will read and sign a Purchasing Card Agreement prior to the issuance of a PCard. The Purchasing Cardholder is responsible for the following: Adhering to policies and procedures and (If the Purchasing Cardholder reviews/submits before their ten day window, these are additional days that the Approving Manager has to approve before the 17 total day review and approve cycle). Recommending suspension and termination of PCard to PCard Administrator. Insuring that no unauthorized purchases are made. Assuming responsibility for all purchases made with the PCard. Immediately reporting lost or stolen cards to Capital One and PCard Administrator. Making every reasonable effort to resolve disputed purchases with the merchant in a timely manner. Obtaining and submitting, in a timely manner expense reports for approval, including all required receipts. Ensuring that the merchant/vendor does not send an invoice to the Company for payment in addition to PCard payment. Immediately reporting all unresolved, disputed or unauthorized purchases to Capital One. Obtaining monthly Statement of Accounts on-line via Concur. Reconciling, reviewing coding, adding any OOP and expense descriptions on all transactions, resolving any disputes, electronically authorizing using Concur, and uploading all receipts (including OOP) to Concur. This process should be completed within ten days of the Billing Cycle End Date. Keeping PCards properly safeguarded and not allowing other persons to use the card. Reporting any instances where merchants/vendors raise their prices due to the use of a PCard or credit card. Signing the back of the card. Approving Manager is responsible for the following: Reviewing their respective Purchasing Cardholder s activity, OOP, receipts and approving it on-line using Concur within seven days of the Purchasing Cardholders review/submission. This must be complete within 20 days from the Billing Cycle End Date. (If the Purchasing Cardholder reviews/submits before their ten day window, these are additional days that the Approving Manager has for approval). Recommending suspension and termination of PCard to PCard Administrator. Monitoring adherence to PCard policies and communicating any problems to PCard Administrator. Notifying PCard Administrator if employee is terminating prior to termination, insuring expense reports are submitted in Concur where possible and collecting the PCard and any outstanding receipts/expense documentation from the employee. Submitting the PCard applications/spending limit change requests to the PCard Administrator for appropriate review/approval. Capital One is responsible for: Processing PCard applications/spending limit changes as submitted by the PCard Administrator. Issuing PCards based on approved applications from the PCard Administrator. Providing monthly billing summary advisement to PCard Administrator. Suspending or canceling PCard on advisement from PCard Administrator or on report of lost or theft of card. Supporting Concur software to track activity and analyze usage patterns. Taking complaints and researching disputed items for possible resolution when disputes cannot be otherwise resolved. Approving Manager: Purchasing Cardholders are assigned to an Approving Manager, who is usually the individual s direct supervisor. One Approving Manager may be responsible for several Purchasing Cardholders. 3

PURCHASING LIMITS USING THE CARD Monthly spending limits are assigned to each PCard and will be communicated to the respective Purchasing Cardholder. These limits are established based on anticipated use, the type of use and Approving Manager s recommendations. These can only be changed with the email approval of an Approving Manager. Purchasing Cardholders may also request their Approving Managers to use their PCard to procure something on their behalf in the event they have exceeded their spending limit. You can check your available credit at any time on-line at www.commercialcardconnect.com PURCHASES ALLOWED WITH THE PURCHASING CARD The PCard Program is designed to expedite the purchase of essential business related goods and services. All PCard purchases are for business related items ONLY. There are three general use types for the PCards: Travel & Entertainment (T&E): travel or entertainment costs incurred for approved business related activity only. Maintenance, Repair and Operating (MRO): small dollar transactions required either in a plant or in a branch to maintain, repair or continue normal business operations. These are non-inventory items that can be efficiently procured using the PCard due to the transaction amount and nature of the purchase. The specific use and limits will be further defined by local management on a location by location basis. Therefore, attempted use outside the designed purpose (or merchant) will be declined at the point of sale. Most Purchasing Cardholders have access to only one of these groups. In some cases merchants may not be properly defined to a merchant category by MasterCard. If you are attempting to transact a valid business transaction and you are declined, please contact the PCard Administrator for assistance. PURCHASES PROHIBITED WITH THE PURCHASING CARD Personal expenditures Capital expenditures (should be done using a CAR) Cash advances Any non-business related expenditure Any cell phone charges (as reimbursement for personal cell phone use must be preauthorized by the CFO or an individual must obtain a Company device if needed for business.) Any split transactions or installment type transactions that in total would exceed the Purchasing Cardholders purchasing limits Any purchases outside those deemed allowable as described above Other inappropriate usage as established by the PCard Administrator or Goodman Policies and Procedures. General and Administrative Expenses (G&A): purchases made for office related expenditures. This may include office supplies, courier/mail services, kitchen supplies, office equipment repairs, office maintenance repairs and utilities. Each of the above types or groups has access only to pre-determined groups of merchants or merchant category codes (MCCs). 4

SECURITY The Cardholder is responsible for the security of the card. This card should be treated with the same level of care as the Purchasing Cardholder would use with his/her own personal credit cards. The account number should be guarded; making sure it is not accessible to anybody. The Purchasing Cardholder must not receive cash back for any refunds or exchanges. Any refunds or exchanges must be credited back to the PCard account. SUPPORTING DOCUMENTATION FOR PCARD All transactions must be supported by receipts, detailed invoices (e.g. with sales tax), or credit slips. In the event that proof of purchase is lost, the Purchasing Cardholder must obtain a copy from the merchant. This also holds true for OOP transactions. Merchants processing transactions on the PCard should not mail invoices to Goodman, as this could result in duplicate payment. OUT-OF-POCKET (OOP) OR CASH EXPENSES and Mileage When a Purchasing Cardholder is unable to purchase authorized items using their PCard, they should use cash or an alternative personal credit card (only if MasterCard is NOT accepted). They should then submit these transactions for reimbursement using the OOP portion of the Concur expense tool. The date input must be the date the expense was incurred. Receipts must be uploaded and submitted online. Mileage reimbursement must be noted in terms of total miles, to/from information and the business nature of the drive. Once the Approving Manager has approved the transactions online in Concur, they will be electronically submitted to Corporate Accounts Payable for payment. The Purchasing Cardholder will then receive a payment (ACH or AP). Employees, who do not have a PCard, are also required to use the OOP portion of Concur for submitting all reimbursable business related expenditures. Employees claiming business expenses for the first time should contact Pcard administrator and request to be set up in the system. 5

USING THE PCARD A Purchasing Cardholder needs an item or service. The Purchasing Cardholder determines if the item or service is obtainable under the guidelines for using the PCard described herein. The Purchasing Cardholder purchases the item with the PCard, receives the item or services, verifies all items/services ordered were properly received, signs the credit card receipt and/or invoice itemizing the transaction and records on the related receipt the description of the transaction (E.g. business dinner with John Doe of ABC Company to discuss new business opportunities). All business meals and entertainment must include a detailed description of attendees, company, and nature of the meeting (on the receipt itself and via the Concur system). The Purchasing Cardholder retains the receipt. If the purchase was made on behalf of an individual that reports to the Purchasing Cardholder (e.g. the Approving Manager uses their PCard), it is the Purchasing Cardholder s responsibility to obtain the receipt and review for propriety. The Purchasing Cardholder should ensure the merchant/vendor does not send Goodman an invoice for the transaction. The Purchasing Cardholder can review transactions on-line at www.commercialcardconnect.com This practice is strongly encouraged. Within 2-3 days after the Billing Cycle End Date (27th day of each month) the Purchasing Cardholder receives an automated e-mail from Concur that their Statement of Account is ready for review. The Purchasing Cardholder will then access the Concur system on-line (via the web) and reconcile their charges. This includes verifying the accuracy and validity of all transactions by comparing them to each receipt, uploading receipts into Concur adding descriptions for the transactions, reviewing the accuracy of the default general ledger coding and adding any OOP expenditures. Please note that corporate card transactions can only be reconciled after the 27 th day of the month. Once the online reconciliation is complete the Purchasing Cardholder should then approve/submit ( review complete ) their online statement of account using the Concur system. The above process must be completed within 10 days of the Billing Cycle End Date.The PCard Administrator will track any such failures to submit within 10 days from The Billing Cycle End Date. Non-compliance may result in suspension of PCard privileges. In addition, system will prevent submission of OOP expenses for reimbursement until all due PCard transactions are assigned and submitted. The Approving Manager will then be notified via the Concur system that the Statement of Account is ready for review. The Approving Manager should review the receipts on-line, review all Purchasing Cardholder s transactions for accuracy, validity, proper supporting documents and correct general ledger coding. Once the Approving Manager has reviewed the Statement of Account they need to electronically approve the on-line Statement of Account using the Concur system. 6

RECORD RETENTION Any exceptions to the information on the statement of the Account (e.g. disputed items, erroneous charges, credits) should be noted in the system and communicated to the PCard Administrator. The Approving Manager has at least seven days (more, if their Purchasing Cardholder completes the review before their ten day window) to complete the review process. After this time, any unpaid out-of-pocket expenses would move into the next month s cycle for payment. PURCHASE RETURN The Purchasing Cardholder is responsible for obtaining a credit from the merchant when purchased merchandise is returned to the merchant for any reason and is to make certain that the credit is credited to the Purchasing Cardholder s account. The Purchasing Cardholder is also responsible for settling any other disputed items or erroneous charges directly with the supplier or with Capital One. No cash refunds are allowed. STATEMENT OF ACCOUNTS / PCARD TRANSACTION The Purchasing Cardholder will receive an email notifying them their Statement of Account is available for review at the end of each Billing Cycle End Date. The Purchasing Cardholder will then log onto Concur and reconcile their charges which includes verifying the accuracy and validity of all transactions by comparing them to each receipt, adding descriptions for the transactions, reviewing the accuracy of the default general ledger coding and adding any OOP expenditures. All reconciled Statement of Accounts must be electronically acknowledged as reviewed ( review complete ) and supporting documentation uploaded into Concur within ten days of the Billing Cycle End Date. The Approving Manager will electronically approve and submit in Concur expense tool the Statement of Account within seven more days or 17 days from the Billing Cycle End Date Purchasing Cardholders are required to maintain records of their card transactions until they are reconciled to a Statement of Account and uploaded into Concur Expense tool. LOST OR STOLEN PURCHASING CARD When it is determined that a PCard has been lost or stolen, it is imperative Capital One be notified immediately at 1-866-772-4497. The PCard Administrator should also be advised on the same business day. The Purchasing Cardholder should be prepared to provide the bank with at least the following information: The name on the PCard Account Number PCard expiration date The last authorized charge made on the card Nature of the loss It is imperative to cancel the card immediately to stop Goodman s liability on lost or stolen cards. Goodman is potentially liable for all charges until the card is reported lost or stolen. If the lost/stolen card is not reported in a timely manner, the Company may be found responsible for all charges made against the PCard from the time it is lost or stolen until Capital One is notified. Purchasing Cardholders failing to report a lost/stolen card in a timely manner may receive disciplinary action and could potentially be found liable for charges incurred. 7

REQUEST FOR NEW OR CHANGES TO ACCOUNTS To request a new PCard, a Purchasing Card Application and Purchasing Card Agreement forms must be completed and forwarded to Pcard Administrator. For changes to spending limits on an existing PCard, email approval from cardholder s manager is required. It will usually take up to 24 hours to make spending limit changes (which can be expedited in the event of an emergency) and seven to ten business days to obtain a new PCard. Forms are available on the Goodman employee intranet under finance tab Concur and Pcard training info and forms UNAUTHORIZED USE OF THE PCARD The purchases that the Approving Manager or the PCard Administrator deems inappropriate as discussed in this procedure will be referred back to the Purchasing Cardholder for justification and/or explanation. Unauthorized use of the PCard may result in revocation of use privileges and can result in disciplinary action, up to and including termination and possible legal action. In addition, Goodman will not be liable for charges incurred outside of the parameters of its policies and employee will have to pay this amount back to Goodman. Also, the Employer can deduct any such amounts owed from employees paycheck. An employee having knowledge of violations to this procedure, or any other procedure or policy governing the use of the PCard, must immediately report such activity to the PCard Administrator. QUESTIONS Any questions or comments regarding this policy or the application of this policy should be referred to the PCard Administrator: pcard@goodmanmfg.com CARD SUSPENSION Non submission of Pcard expenses within 60 days of the given Billing Cycle End date will result in suspension of the Pcard. Reactivation of the card will require submission of all pending expense transactions and VP approval. Employees whose expenses are not submitted within 90 days of the given Billing Cycle end date will have their Pcard cancelled and will have to obtain approval from their Functional VP before reapplying for the new card. Reapplying for the new card will require completion of the new card application form. Pcard administrator will send follow up reminders after 30 days to all employees with Past due unsubmitted Pcard transactions. After the second suspension of Pcard due to noncompliance with expense submission deadlines employees Pcard will be permanently cancelled without the possibility for re-applying for the new card. In case of emergency where employee s Pcard is suspended but employee needs to use the card urgently, it is possible to re-activate the card after obtaining VP approval. TERMINATION CLAUSE Transfer, resignation, or termination of employment are reasons for cancellation of the PCard. It is important to physically obtain and cancel a card immediately when an employee leaves the Company voluntarily or is terminated by Goodman. Capital One will not cover any charges incurred between the employee s termination date and the date the card is cancelled. The Approving Manager must ensure that the PCard Administrator is notified immediately upon termination, resignation or transfer of one of their Purchasing Cardholders, and if possible, prior to such event. 8

9