Procurement Card Procedural Manual And User s Guide

Procurement Card Procedural Manual And User s Guide September, 2008 Updated Feb., 2017 Office of Fiscal Services Purchasing Department Accounting Department Charles County Public Schools La Plata, Maryland 20646 301-934-7340

TABLE OF CONTENTS CONTENTS PAGE NUMBER Purpose 3 Background. 3 Who May Participate In the P-Card Program. 3 Roles 3 P-Card Administrator (PCA) Purchasing Dept 3 P-Card Managers (Principals/Dept. Heads). 3 Accounting Dept.. 4 Cardholder... 4 Individual Card 4 Site Card 4 Site Coordinators (Financial Secretaries) 4 Overview of the P-Card Purchase & Payment Process...5 Establishing a P-Card Account 5 Obtaining P-Cards from the Bank...5 P-Card Use...6 Billing and Payment Process 6 Review and Reconciliation..6 Clearing Account.6 Uses..6 P-Card Limits...7 Types of P-Card Purchases..9 Local/Walk-In..9 Telephone and Internet Ordering.10 Telephone.10 Internet. 11 Monthly Statements. 12 Internal Control Procedures (ICP)...14 Individual Card.14 Department Card...14 Program Training..14 P-Card Manager Training.14 Card User Training...14 Card Characteristics.14 Other Program Requirements...16 Adequate Funding...16 Transaction Log...16 Sales Tax Exemption...16 Employee Acknowledgement Disclosure Form...16 Using Department Director s Statement of Responsibility..17 Receipts 17 Signature...17 Document Retention.17-1 -

Card Management Software (Works)..17 Weekly Transaction Report.17 Reconciliation.. 17 Reconciliation to Bank Records... 17 Reconciliation to CIMS....18 Reconciler s Signature and Date..18 Card Use by Reconciler....18 Problem Resolution...18 Dispute Procedures...18 Lost or Stolen Card...18 Reissue of a Lost or Stolen Card...18 Card Cancellation..18 Card Changes.18 CCBOE Website 18 Bank Statements 19 Fraud and Misuse...19 Deterrence.. 19 Occurrence of Fraud or Misuse......20 Compliance Reviews..20 P-Card Procedures and Timeline for Processing Documentation..20 Works Procedures...21 Transactions in Works.22 Changing an Account Number on a Transaction 22 Signing Off on a Transaction..24 Assigning Multiple Account Codes for Transactions.25 Student Activity Account Codes.26 Attachment A Attachment B Attachment C Attachment D Attachment E Attachment F Attachment G School/Department Checklist for Establishing P-Card Program..27 Employee Acknowledgement Disclosure Form 28 Using Department s Statement of Responsibility.29 Merchant Category Code (MCC) Groups.30 Monthly P-Card Transaction Log for Individual Cards....31 Monthly P-Card Checkout & Transaction Log (Site Cards).32 Request for New P-Card...33-2 -

PURPOSE CHARLES COUNTY PUBLIC SCHOOLS The purpose of the Charles County Public School (CCPS) procurement card (P-Card) program is to provide CCPS with an efficient and reliable way to make low dollar value purchases. The P- Card will be used instead of the Please Pay form or small dollar amount purchase order. With special approval from the Assistant Superintendent for Office of Fiscal Services, the P-Card may also be used as an alternative to purchase orders for large purchases greater than $2,500.00 in emergency situations. BACKGROUND While the P-Card can simplify and expedite procurement, its use requires strict adherence to internal control procedures and a commitment to accompanying accounting procedures. In most cases, card use reduces staff purchasing efforts and shortens order processing; however, it may increase financial tracking and control efforts. WHO MAY PARTICIPATE IN THE P-CARD PROGRAM Unless otherwise specified, the Assistant Superintendent for Finance, Business Administration & Technology delegates authority to use the P-Card to all schools and support facilities. A school or support facility that wishes to establish a P-Card program may do so by following the steps outlined in the Checklist for Establishing a P-Card Program (Attachment A to this document). The Assistant Superintendent for Finance, Business Administration & Technology may terminate or suspend a school or support facility s P-Card program temporarily or permanently based upon noncompliance with P-Card policies and procedures. The CCPS Purchasing Manager is also authorized to suspend or close a particular card. ROLES P-Card Administrator (PCA) - Purchasing Department: The Purchasing Manager, shall act as the PCA for CCPS and will coordinate the issuance, maintenance, and cancellation of the cards with the users. The PCA will provide mandatory training and a portfolio carrying case for the card, which will include a procedure manual and transaction logs for all P-Card managers and card holders. An annual inventory of P-Cards at all schools/departments will be conducted. The PCA will also be responsible for monitoring fraud alerts and maintaining a list of all cardholders at each school/department. A monthly list of transactions is sent to department heads to inform them of the purchases made by their employees or departments under their jurisdiction. P-Card Managers (Principals/Department Heads): The P-card managers (or their designee) shall act as the custodian of each card issued and oversee its use, whether it is one to an individual at their school/department or for a school or department. Custodial responsibilities include: Completing Request for New Purchasing Card (Attachment G) for each P-Card needed; Setting individual spending limits within established guidelines; Approving all P-Card expenditures; Reviewing and approving cardholder P-Card transactions and initial each receipt (optional internal audit procedure); Collecting P-Cards from terminated, retiring or transferred employees; Notifying the Purchasing Department of any lost, stolen, or terminated P-Cards or any - 3 -

changes to spending limits; Resolving inappropriate or disputed charges; Monitoring cardholder activity for appropriateness and disciplinary action for misuse of the P-Card; Ensuring that the individual or site card user received goods or services; Ensuring the P-Card Manager has trained, back-up support to reconcile and process monthly VISA statements for payments in their absence; Ensuring P-Card Statements are reviewed, coded correctly and all documentation is received; Approve P-Card payment request and report. Accounting Department: The Accounts Payable staff will review all charges prior to signing off on transactions to check that they seem business related, the account charged is correct and have the proper approval. The Accounts Payable staff will notify the P-Card Manager (or designee) of any identified inappropriate expenditures. Cardholder: It is the primary responsibility of the cardholder and/or the P-Card manager (or designee) to properly safeguard their P-Cards. The cardholder must be informed of the cardholder responsibilities, sign the Employee Acknowledgement Disclosure Form (Attachment B), return card to P-Card Manager or site coordinator after use (if site card), report to P-Card manager or site coordinator if card is lost or stolen, and if 10 or 11 month employee, surrender card on last day of school. P-Cards shall only be used by the authorized individual for appropriate and authorized district/school purchases. The cardholder must turn in receipts and a P-Card Transaction Log Form to the P-Card Manager. All users surrender their cards upon termination of employment, change of work site or change of position, or upon the request of the P-Card Manager or P-Card Administrator. Individual Cards may be issued directly to an employee, with the employee s name imprinted on the card, after receiving training and signing the Employee Acknowledgement Disclosure Form (Attachment B). Employees must be full time employees. With the exception of executive staff, new cardholders must complete their probationary period and then must be approved by their supervisor in order to be considered for a card. Site Cards are issued directly to the school/department requesting cards and will have the school or department s name imprinted on it. All site card users must receive training, provided by the site coordinator and must sign and complete the Employee Acknowledgement Disclosure Form (Attachment B) and the Monthly P-Card Transaction Log (Attachment F) prior to using. Since there is NO insurance against misuse provided by Visa for site issued cards, only the most responsible and trustworthy employees should be allowed to use them. Site Cards should be stored in a secure location (preferably a safe or lockable file cabinet/drawer), for shared use by employees (upon approval for purchases by P- Card Manager) on an as needed basis. Site Coordinators (Financial Secretaries): It is the responsibility of the Site Coordinator to reconcile cardholder receipts with the monthly statements within the required time frame for site cards and review monthly P-Card transaction logs and supporting documents for individual cardholders. The CCPS bank account (either the Board account or the school checking account is automatically charged on or around the 25 th of the month. Each cardholder s P-Card Transaction Log form with appropriate general ledger account code (or SAF account code), documentation and Bank of America statement must be sent to the School Administration Department by the 11 th day of the following month. Additional responsibilities include: - 4 -

Attending P-Card training; Training back-up support to do the duties of the site coordinator in their absence. Ensuring that all users surrender their P-Cards upon termination of employment, change of work site or change of position. Any disputes that arise are indicated on the site statement in which they are billed. The cardholder and the site coordinator are responsible for the resolution of disputed amounts. Site Coordinators (Central Office Secretaries): Responsibilities are similar to the school site coordinator, however, the Board fund cards are all automatically charged to the Board s checking account on the 25 th of the month. The completed P-Card Transaction log, documentation and Bank of America statement must be sent to the appropriate manager. In the case of the executive staff, the superintendent will sign off on the documentation and then is sent to the accounting manager for review, signoff as manager and then the assistant superintendent of finance, business administration and technology will also review and sign the Bank of America statement and transaction log. THE PROGRAM MANAGER Primary Program Manager-The school Principal/Support facility Director shall identify a Program Manager who will be responsible for all aspects of the P-Card program within the School/support department. The Program Manager is the PCA s point-of-contact for the school/support department. All requests for card information or card changes must come through the school/support department Program Manager or an individual specifically identified by the Program Manager. Alternate Program Manager- The PCA recommends that the school/support department assign an Alternate Program Manager. This allows continued management of the program in the Program Manager s temporary absence. Replacement of Program Manager- If the primary Program Manager will no longer perform as such, he or she shall notify the PCA. The notification should include the name of the new Program Manager. If a new manager is not immediately available, the notification should identify a temporary Program Manager. In order to participate in the P-Card program, the school/support department must have an active Program Manager at all times. OVERVIEW OF THE P-CARD PURCHASE AND PAYMENT PROCESS Establishing a P-Card Account Schools or support facilities may request P-Cards by submitting an application Request for New Purchasing Card (Attachment G) to the PCA. The request indicates the P-Card limits requested, based on CCPS approved limits, and the fund/budget code where card transactions will post. If P-Card expenditures will affect more than one fund/budget code, the P-Card transaction log must note the general ledger code for each purchase. Fund/budget codes may also include project or grant numbers, if desired. Obtaining P-Cards from the Bank The PCA reviews the application and forwards it to the bank for processing. The bank establishes a new account and forwards the new card to the PCA. The PCA determines the credit limit on the card, the default account number, distributes the card to the P-Card Manager, and - 5 -

then activates the new account. P-Card Use The school/department uses the P-Card in accordance with this procedural document and CCPS procedures. The school/department is required to keep a daily log of all card transactions, including purchases and credits. Billing and Payment Process The PCA and Accounting can obtain a report of the month s transactions from the Works site. This report is prepared on the last day of the month following the month transactions were made. The documentation, statement and transaction log is not due until 30 days after the close of the month. The report is then sorted by account number and a journal entry is made to the general ledger account as a month end adjustment. The school system s checking account is charged the total amount for Board and Grant fund purchasing card transactions on the 25 th of following the month. The school/department is responsible for pursuing credit adjustments for any items that are incorrectly billed (returned items, taxes charged on purchases, etc.). The school/ department should first request an adjustment from the merchant. If that request is unsuccessful, the school/department should contact the bank to report a dispute. Credit adjustments will appear in subsequent billing cycles. The bank provides further details on this process. The P-Card Manager may contact the PCA if assistance is required. Review and Reconciliation Each month, the individual or site coordinator is required to prepare a monthly p-card transaction report using the P-Card (Works) software to gather current month transactions. The site coordinator reconciles this report with documented purchases to determine that all charges are valid. In addition, the total amount due on the Bank of America statement received at the beginning of the following month needs to be the same as the total submitted on the P-Card Transaction Log. If there is a large volume of activity on the card, the transaction log can be updated on a weekly basis. The individuals or site coordinators work with the merchant and/or the bank to resolve any discrepancies. Schools/departments are required to reconcile on a monthly basis, at minimum. Clearing Account A clearing account may be used as a last resort. The accounting department will monitor this account. This account must be cleared out monthly. USES Subject to the limitations discussed in this manual, the P-Card may be used for the following: Travel expenses - Registration, airline, shuttle, hotel and meals. There are limits on amounts for meals; and non-reimbursable expenses will be blocked. Not all cards have the ability to pay for travel expenses. If a school/department does not normally have these expenses and they have a need to go to a conference, contact the PCA to change the card temporarily to be able to pay for conferences. Non-contract goods and services - Purchase of low dollar value goods and services. CCPS contracts - Provided the contractual agreement between CCPS and the vendor allow - 6 -

it, CCPS schools/support facilities may use the P-Card to order from CCPS contracts. Because P-Card ordering will not provide the vendor with a written purchase order, the card user must be certain that he/she obtains the contract price when placing the order. The card should not be used to pay for purchases for vendors who are sole proprietors (vendors who need a 1099 at the end of the year). P-card may only be used for purchase of materials and supplies to be used in CCPS programs. NO personal items may be paid by using the P-Card, even if the employee intends to reimburse CCPS. P-Card may only be used by the individual to whom the card was issued. It is not permitted to be used by family, friends or unauthorized CCPS employees. Site cards (if issued) can be used only by CCPS employees who have received P-Card training and working at the location; and are authorized by the school/department s P-Card Manager (principal/department head). P-Cards may NOT be used for the following: Cash Advances or Gift Cards Personal Purchases of Any Kind - For example, if viewing an in-room movie while on travel status, the traveler may not use CCPS P-Card to pay the movie charge, even if traveler intends to later reimburse CCPS. Purchases by Non-Employees - Only CCPS employees are authorized to make P-Card purchases. Capital Items - Those items defined as capital expenditures by the Division of Finance, Business Administration and Technology. Items with a unit cost of $5,000 or more. If in doubt, contact the Fixed Asset Analyst, 301-934-7338. Inventory Items - Stocked items that are replenished through CCPS warehouse inventory management process. Split Purchases - A split purchase is one in which the original purchase requirement for the same or related goods or services is broken into multiple smaller purchases which are made over a short period of time. In most cases, a split purchase is created to circumvent a card s single purchase or cycle spending limit. Split purchases are prohibited unless to accommodate accounting needs or to facilitate delivery to separate locations. Other - Purchases prohibited by CCPS. No purchases of services to individuals or sub-contractors (1099 expenditures) may be made. P-CARD LIMITS Based on anticipated use, total number of cards, budget constraints, and any other relevant factors, CCPS must set limits, as discussed below, for each card requested. Limits may be set at different levels for each individual P-Card. - 7 -

Generally, CCPS purchasing policy restricts the single purchase limit to a maximum of $999.99 or $2,500.00. Policy does not establish maximums for other limits, as discussed below. However, all limits must be supported by the P-Card s business requirements. P-Card limits provide an important safeguard against fraud and misuse. It is important that P-Card limits be set as close as possible to anticipated use. The Purchasing Department will work with the school/support department to determine appropriate limits. Single Purchase Limit (SPL)-The amount spent on a single purchase or transaction of $2,500 and over from a single vendor. The maximum single transaction limit is $999.99 for general purchases. Temporary single purchase thresholds may be adjusted for materials of instruction (MOI) and or emergency purchases. Single purchase threshold increases must be approved by the executive staff in accordance with purchasing policies and procedures; and must be submitted to the procurement manager in writing (i.e. e-mail, etc.). Exceptions: Travel Cards-Cards that will be used frequently for travel purchases may be established with a $5,000.00 SPL for travel vendors. SPL from other vendors will be limited to $999.99. Travel vendors include hotels, motels and airlines. They do not include training providers. Special Use Cards-If there is a business need for a card with a higher single purchase limit, the school/central department may request a special limit card. The request must be made by the school/central department principal/department head in writing to the Assistant Superintendent for Finance, Business Administration & Technology. The request should detail the business need for higher limits and the dollar limit and number of cards desired. In general, exceptions will not be granted to meet a temporary, one-time requirement. Cycle Spending Limit (CSL)-The maximum dollar limit of total purchases allowed for the month. This limit should be set at an amount slightly above anticipated monthly spending. Authorizations per Day-The maximum number of purchases allowed in one day. Like the CSL above, this number should be just higher than the maximum number of purchases anticipated in one day. Transactions per Cycle-The maximum number of purchases allowed in a month. This figure should be slightly greater than the maximum number of purchases anticipated on a monthly basis. Merchant Category Code Group (MCC Group) - In an effort to ensure that cards cannot be used to make improper purchases, CCPS has blocked purchases from certain categories of vendors. See Attachment D for a list of these vendor categories. Attempts to make purchases from those vendors will result in an unauthorized purchase message. There are three categories of MCC group schemes designed for CCPS use: CCPS1-This group excludes purchases from vendor groups listed on Attachment D. Purchases up to a maximum of $2,500.00 may be made from all other authorized vendors, including travel vendors. This MCC group is CCPS standard P-Card group. CCPS2-This group is the same as CCPS1 above, except that purchases up to $5,000.00 (SPL) may be made from travel merchants. This group is designed for departments that have heavy travel needs. Specific travel merchant groups are identified on Attachment D. - 8 -

Custom Groups-If supported by a business need, CCPS will work with the school/support department s Program Manager to develop a custom MCC group. Split Purchase-Splitting a purchase to circumvent a card s spending or authorization limit is prohibited. TYPES OF P-CARD PURCHASES Local/Walk-In - The P-Card may be used at any store or business that accepts Visa. Since a few suppliers may still not accept the card, prior confirmation of their acceptance is recommended. A. How to make a local/walk-in purchase - 1. Receive prior authorization from your P-card Manager (or designee) to make P-Card purchases following whatever internal procedures have been documented and in place at your site. 2. If you do not have an individual card issued to you, check out a site card from the Site Coordinator, filling out the P-Card Department Log (Attachment F). 3. When making the purchase, inform the merchant that you are an employee of the school system, making a tax exempt purchase and provide them with our Sales Tax Exemption Number (imprinted on the card). 4. If, for whatever reason, the card is declined, return to your site and report the problem to your P-Card Manager or Site Coordinator for investigation. 5. If accepted, complete the transaction and obtain a receipt, which should contain the following minimum information: Imprint of the P-Card, including card number, expiration date, cardholder name and/or site name for general cards; Total dollar amount of purchase; Date of the purchase; Brief description of the item(s) purchased and itemized with individual pricing; Imprint of supplier s name and identification. NEVER ASK THE MERCHANT TO BACK ORDER MERCHANDISE IF IT IS NOT IN STOCK. 6. As the sales receipt is being completed, the supplier will obtain authorization for the transaction via either telephone call or direct telecommunication link to the Visa Card Authorization network. The supplier will obtain an authorization number as long as the purchase is within the limits established for your individual or site card. 7. You will be requested to sign the sales receipt. Before signing you should: Verify that the dollar amount is correct; Verify sales tax is not charged to your card. CHECK BEFORE LEAVING THE STORE; Verify that the sales receipt/cash register tape is itemized with each individual purchase/item, as to the description, quantity and unit cost. 8. You will be given a copy of the sales receipt/cash register tape. These should be turned in immediately and daily to the Site Coordinator upon your return. UNDER NO CIRCUMSTANCES SHOULD THESE BE HELD ON TO OR ACCUMULATED. B. All P-Card transactions will be recorded on your individual/site Monthly P-Card Transaction Log (Attachments F or G). This should be completed by the Site Coordinator - 9 -

or by the cardholder and turned into the Site Coordinator. C. Any transaction submitted, which does not contain sufficient documentation and information explaining the purchase (descriptions, quantity, unit price, date, suppliers name, etc.), will require an explanation for the lack of supporting documentation and is to be submitted and approved by the P-Card manager (or designee). Telephone and Internet Ordering-The P-Card may be used to order goods by telephone and through the Internet. This includes electronic ordering from CCPS contracts that utilize this process. Telephone/Mail/Fax Orders A. How to make a telephone, mail or fax order. 1. Follow steps 1-3 for a walk-in purchase. 2. You must confirm that the supplier agrees to charge the P-card when purchase is sent. Provide merchant with the P-Card number, expiration date and shipping address. Under No Circumstances Are Purchases To Be Delivered To Your Home Address. 3. If the card is declined, report the problem to your P-card Manager or Site Coordinator for investigation. 4. If accepted, complete the transaction and request a faxed order confirmation, including all shipping and handling charges. This will serve as your receipt. NEVER ASK THE MERCHANT TO BACK ORDER MERCHANDISE IF IT IS NOT IN STOCK. Write the P-Card number on the order confirmation if it is not already noted on the confirmation. 5. If you signed out a Site Card, return it immediately upon completion of your transaction to your Site Coordinator. 6. Inspect the shipment of items when it arrives for completeness and any possible damage. 7. Immediately report damage to the carrier and/or merchant. 8. Remove the packing list to match with the order confirmation, if received. Verify the following immediately: All goods/items were received; The dollar amount is correct; Verify sales tax has not been included. 9. Verify that the packing slip shows sufficient detail of the types, quantities and unit cost. 10. Telephone/mail/fax orders are to be placed for items available for immediate delivery and shipment only. BACKORDERS WILL NOT BE ALLOWED. 11. Record the transaction on the Monthly P-Card Transaction Log (Attachment F or G). Indicate in the appropriate column, the type of order and include the individual s name, if applicable. This report is to be turned into the Site Coordinator on a monthly (at a minimum) basis. 12. Turn the packing slips in to the Site Coordinator IMMEDIATELY upon receipt and verification. Note: If you do not have sufficient documentation for a transaction, an explanation for the lack of supporting documentation must be generated and submitted to the P-Card Manager/Designee. - 10 -

Internet Orders CHARLES COUNTY PUBLIC SCHOOLS A. How to make an Internet purchase - 1. Follow steps 1-2 for a walk-in purchase. 2. Follow the merchant s on-line order entry process and provide the merchant with the card number, expiration date, and if possible, the tax exemption number imprinted on the card. 3. If the card is declined, report the problem to the P-card manager or site manager for investigation. 4. If accepted, complete the transaction and print out a copy of the order confirmation listing the total amount of the transaction, which should include all shipping and handling charges. Write the card account number on the order confirmation if not already imprinted. NEVER KNOWINGLY ORDER ANYTHING FLAGGED OUT OF STOCK OR ON BACK ORDER. 5. Follow the remaining steps 5-12 for telephone/mail/fax purchases. NOTE: There is a potential problem for those of you who order over the Internet/telephone/ fax using a P-card. The problem occurs when a merchant partially ships and invoices only for the merchandise shipped. Unfortunately, this is not always known at the time the order is placed. The order confirmation you obtained shows the total amount of the purchase for which you have been charged. The problem occurs when a charge for a portion of that amount is reported to Visa by the merchant and it appears on your monthly statement as a partial amount, which cannot be readily matched to a specific transaction. Please be aware, you will need to monitor and watch these transactions more closely until paid in full. A good idea would be to list the payments and dates on a master sheet, and subtract the payments from the total amount of the order. If the final total is less or more, remember to note the adjustment on your records. You should only note the amount paid on the P-Card Transaction Log not the amount of the order. For those schools or departments that order books from Amazon, this will be of particular problem. Amazon will send the shipments as they are ready. It is up to the site coordinator to make sure that all items have been received. - 11 -

MONTHLY STATEMENTS CHARLES COUNTY PUBLIC SCHOOLS A. The CCPS has chosen a month end (last day of the month) billing cycle. B. For reconciliation purposes, your school/department s Site Coordinator will utilize 30 days for each cardholder and/or site card issued to that school/department. Since this is real time, upto-date, with current information, it will enable sites to begin the reconciliation process early to expedite payments. You can use the Works online transactions to create your monthly Transaction Log. If you do not receive the Bank of America statement in the mail by the due date, a monthly statement copy, printed from the bank s website (Works) can be generated. Make sure it is printed the next day following the last day of the previous month s billing. Only statements indicating the total monthly dollar amount charged will be accepted by Accounting. Remember that payments are made automatically by Bank of America on the 25 th of the month following the transaction. C. P-Card statements will be mailed directly to each site from the bank. When your original bank statement is received at your site (routinely takes 5 mailing days), a copy of the statements should be sent to the Accounting Department. D. All receipts/packing slips should have been turned into the Site Coordinator on a daily basis. CARDHOLDER SHOULD NOT HOLD RECEIPTS. E. The transactions on the P-Card Transaction Log, initiated by the Site Coordinator and signed by the P-Card Manager, must be matched to each purchase listed on the Bank of America statement with a sales receipt or packing slip, which verifies/authorizes the purchases. F. The Site Coordinator must report any/all charges that appear to be inappropriate/ unauthorized to the P-Card Manager (or designee) with proper documentation. G. To prepare the monthly statements for payment, the Site Coordinator must do the following prior to sending to the Accounting Department: 1. Match each charge with a sales receipt or packing slip; 2. Code each charge to the appropriate account, including credits, tax (if charged), and disputes in the software (Works); 3. Verify that No State Sales Tax was charged. If you notice sales tax has been charged in error, contact the vendor to obtain a credit for the amount of the sales tax; make sure the credit appears on next statement. 4. Verify that a separate Customer Statement of Error/Disputed Form has been completed for each disputed charge. A copy must be submitted in the payment packet each month until resolved. 5. Report any inappropriate charges to the P-Card Manager (or designee). 6. Report the resolution of any inappropriate charges to Purchasing. 7. If your site receives any reimbursement checks made payable to CCPS, send to Accounting along with the monthly statement. H. The Site Coordinator must have the P-Card Manager (or designee) sign the monthly payment report as authorization for payment. - 12 -

I. Verify the P- Card Transaction Log matches the bank statement total exactly. Do not send any unbalanced reports to Accounting. SPECIAL NOTE: ALL REBATES/REWARDS EARNED FROM THE USE OF THE CCPS PURCHASE CARD MUST BE SUBMITTED WITH YOUR MONTHLY STATEMENT TO ACCOUNTING, NO EXCEPTIONS. - 13 -

INTERNAL CONTROL PROCEDURES (ICP) Individual Card Employee must safeguard the card at all times. Cardholder may not approve own Request for New P-card. Request must be approved by P- Card Manager (principal/department head). Any changes to limits of MCC codes must be approved by P-Card Manager. Reconciliation of statement and Monthly P-Card Transaction Log must be done by individual. When reconciliation cannot be performed by the individual, the Site Coordinator or P-Card Manager must perform a detailed review. P-Card Manager review/approval of reconciliation and Monthly P-Card Transaction Log with documentation is required. Department Cards P-Cards must be safeguarded by storing in a locked safe when not in use. P-Cards must be checked out using Monthly P-Card Check Out and Transaction Log. After completion of approved purchase, card must be returned to site coordinator. The P-Card Transaction Log must be completed from the Monthly P-Card Check Out and Transaction Log, attach receipts. Cardholder using a Site Card must be pre-approved on Request for new P-card. Reconciliation of Bank of America statement and Monthly P-Card Transaction Log P-Card must be done by Site-Coordinator. When reconciliation cannot be performed by the Site Coordinator, the P-Card Manager must perform a detailed review. P-Card Manager review/approval of reconciliation and Monthly P-Card Transaction Log with documentation is required. PROGRAM TRAINING P-Card Manager Training-All P-Card Managers are required to attend P-Card Manager training. The PCA will provide this training to P-Card Managers and other school/support department personnel involved in the P-Card program, as requested by the school/support department. The training provides a detailed discussion of the procedures necessary to obtain, use, and properly account for school/support department cards. Card User Training-PCA is required to provide training to all users prior to their first card use. The training should include such subjects as: School/support department procedures for making a card purchase, including required approvals and receipt handling, School/support department contact information for card problems or questions, Policy regarding payment of sales tax, Procedures to report a lost or stolen card, and Reconciling statement to monthly P-Card Transaction Log. CARD CHARACTERISTICS Card Imprint-All cards are imprinted with the Charles County Public Schools seal and the CCPS Maryland state sales tax exemption number. - 14 -

Card Name (Line 1)-Card names are assigned by the issuing school/support department. Card names will be named with the individual s name or for school/support department cards, the name of the school or department. Individual Named Cards-Schools/Support Departments will request cards with an individual s name or for a department card, school/department s name. While individual named cards may require a higher level of administrative effort than school/department cards, it offers a higher degree of security. School/department must have a procedure to collect an individual s card when he or she leaves the school/department or is no longer a card user. Although individual cards may be shared when used to place telephone or Internet orders, sharing of cards is prohibited. For example the secretary places an order for the principal. Individual cards offer a higher level of security than department cards because policy requires cancellation of the card when the cardholder leaves. In addition, the bank offers a higher level of dispute and fraud coverage for individual cards. The PCA will require cards with higher than average risk levels to be individual cards. Examples include cards with single purchase limits over $5,000, cards with large monthly spending limits, and departments that need a large number of users. School/Department Cards - The name of a work group or functional area is embossed on the card for example, Matula Elementary SAF or Matula Elementary Board Funds. Each card must have a unique name. If a school/department has more than one card with the same function, card names may include a number-such as Travel 1, Travel 2, etc. Use of school/support department cards reduces administrative effort, in that it is not necessary to obtain new cards or cancel old cards when employees terminate or are assigned to new locations. School/department cards also facilitate card sharing, reducing the number of cards required. Because the card number is shared, department cards are very risky and do not provide the same level of security as individual named cards (John Doe). In addition, the bank does not offer the same level of dispute or fraud protection as it does for individual named cards. At the school level, the school can maintain two cards, one for the Student Activity funds and one for Board funds (this card can also be used for grants such as Title I if the grant manager authorizes credit card purchases). Make sure when you use the correct card (SAF or Board funds ) make the purchase. Reimbursement for p-card purchases made from SAF requires additional paperwork which is unnecessary. Card Name (Line 2)-The school/department name, abbreviated to not more than six letters, is embossed on the second line of the card. All of the school/department cards must use the same abbreviation. Signature on Card-All individual cardholders must sign in the signature line on the back of the card. School/department cards should not be signed. A signed card will make it difficult for anyone other than the signer to use the card. - 15 -

As an added security measure for department cards, departments may write PLEASE ASK FOR CCPS ID on the signature line to encourage the vendor to request ID prior to processing a purchase. Card Security- Each cardholder will be issued a CCPS portfolio complete with a calculator, procedure manual and transaction log for carrying/storing the card. All portfolios must be kept locked up at each respective CCPS location while not in use. Access to the location should be limited to those individuals who require access to the card. Card Custodian-The P-Card Manager must identify a custodian for each departmental card. The custodian is responsible for the card s physical security. The custodian may be responsible for an unlimited number of cards. If operational requirements necessitate more than one custodian for a card, policy recommends that the department establish a method for tracking card responsibility, such as a chain-of-custody arrangement where one custodian remains responsible for the card until relieved by another custodian. List of Site/Individual Cards-P-Card Managers must maintain a master list of all cards that includes, at a minimum: Card number Card name Card limits Card custodian and location Program Managers are reminded to safeguard this list, whether it is in electronic or hard copy format, because it contains sensitive information regarding department cards. The PCA should have master list of P-Cards issued at each site. An annual inventory should be taken to be sure that 10-11 month employees turn in cards during summer break. OTHER PROGRAM REQUIREMENTS Adequate Funding-Because card purchases do not follow the traditional encumbrance process, departments must devise a method to assure that adequate funds are available before each purchase is made. Transaction Log-A system that tracks card transactions as they occur must be in place. Departments may use an appropriate manual or electronic log to record both debit and credit transactions. Entries must be contemporaneous so that they provide up-to-date information on funds expended and should identify the card user. Sales Tax Exemption-Most CCPS purchases are exempt from Maryland state sales tax. When making a p-card purchase, card users should remind the vendor of our tax-exempt status and examine the receipt to verify sales tax was not charged. CCPS s tax exempt number is printed on the face of each card. By state statute, CCPS is not exempt from sales tax for meals, catered events, lodging (exempt from State sales tax, not local tax), or other accommodations. CCPS is not exempt from sales tax imposed by other states on goods and services purchased outside of Maryland. Employee Acknowledgement Disclosure Form-All first time card users must sign an Employee Acknowledgement Disclosure Form (See Attachment B ). The form acknowledges the employee s responsibilities regarding card use and sets forth consequences for card misuse. The P-Card Manager shall maintain the signed forms at least 2 years following the employee s - 16 -

departure from the school/department. Using Department Director s Statement of Responsibility-This statement acknowledges the director s responsibility for the department s proper use of the P-Card. The department director is required to sign this form (See Attachment C ) prior to the school/department s initial participation in the P-Card program. Receipts-All cardholders and department card users shall retain an ORIGINAL merchant receipt, invoice or credit slip for each transaction. Receipts should show all details pertinent to the transaction, including date of purchase, vendor name and location, item(s) purchased with corresponding description(s) and price(s), and total amount paid. These documents should be associated with the appropriate bank record (monthly statement or weekly transaction report) and retained for review. If the documentation does not include the above information, then another form of documentation must be requested from the merchant. Alternate Receipt-If an original merchant receipt is unavailable, the department may use an alternate receipt, such as an Internet screen print or a faxed receipt. The receipt should contain the same level of detail required for an original receipt. Photocopied Receipt-If a photocopied receipt is retained instead of an original, the record should provide a short explanation as to why the original receipt was unavailable. Missing Receipts-If, for any reason, an original, alternate, or photocopied receipt is unavailable, a memorandum providing the purchase details and reason why a receipt is not available must be included with the appropriate monthly statement or weekly transaction report. Signature - Both photocopied receipts and documentation in lieu of missing receipts must be signed and dated by the P-Card Manager or his/her designee. If the purchase was made by the P- Card Manager or designee, another staff member must sign and date the receipt to maintain an adequate separation of duties. Document Retention - The school/department must retain program documentation for a minimum of three years. Card Management Software - The bank provides p-card management software (Works) that will enable P-Card Managers to create a variety of program related reports. If a statement is not received from Bank of America, a billing statement can be generated as a report. The PCA will coordinate software access and training with school/department P-Card Managers. P-Card Transaction Log - Each month the department or individual is required to prepare a monthly P-Card Transaction Log showing all transactions from the prior week. Individuals/Site Coordinators must review the report each month for unusual or unauthorized transactions. Prompt review is vital to detection of erroneous or fraudulent charges. Reconciliation - P-Card reconciliation is the process of verifying the accuracy of all posted card transactions (charges and credits). The department must perform two reconciliations: 1. Reconciliation to Bank Records - The Site Coordinator is required to reconcile the bank record of transactions to the transaction log and actual receipts to verify that all charges are valid and the correct amounts have been charged. The department may use the monthly P-Card Transaction Log and the monthly billing statement to perform this reconciliation. Reconciliation to the monthly P-Card Transaction Log is recommended as it provides the timeliest information. Weekly review of Works should be made to monitor purchase transactions and to detect erroneous or fraudulent charges. - 17 -

2. Reconciliation to CIMS - On a monthly basis (at minimum), the department must reconcile the bank statement or the monthly P-Card Transaction Log to the amounts posted as expenditures in CIMS. Keep in mind that the expenditures are posted a month after the transactions were made (for example, September transactions are posted in October). If card billing is posted to a clearing account, all charges must be moved to the appropriate expenditure account monthly. Reconciler s Signature and Date - The reconciler is required to sign and date the document reconciled (the monthly P-Card Transaction Log and monthly bank statement) to verify that the reconciliation was performed in a timely manner and establish that an adequate separation of duties exists. Card Use by Reconciler - Policy discourages the reconciler from being a card user; however, if the reconciler uses the card, the reconciliation must be reviewed by the Site Coordinator or P- Card Manager. The reviewer must sign and date the reconciliation. Problem Resolution - The P-Card Manager should attempt to resolve disputes directly with the merchant and/or the bank. If unable to resolve directly within a reasonable time period, contact the PCA for assistance. Any adjustment to billing will be made on subsequent statements. Dispute Procedures - Dispute procedures are defined by the CCPS s P-Card contract with the bank. The contract requires that disputed items be identified within 60 days of the cycle end date for the cycle in which the disputed charge appears on the bank statement. Disputed charges must be identified to the bank in writing. Although items identified outside the 60-day period may still be disputed, the CCPS s legal standing in the matter is decreased. Dispute rights for department cards are significantly limited. Lost or Stolen Card - Report a lost or stolen card to the bank immediately. The bank provides a 24-hour toll-free telephone number for this purpose. The number is included on the paperwork that accompanies each new card. The school/department P-Card Manager must also notify the PCA immediately. All school/department card users should be aware of the procedure for reporting a lost or stolen card, including how to proceed if the P-Card Manager or Site Coordinator is not available at the time the loss is discovered. Reissue of a Lost or Stolen Card - To request replacement of a lost or stolen card, forward a memo from the school principal or department head director to the PCA. The memo should describe the circumstances surrounding the card loss and the steps taken to ensure against future losses. The PCA will evaluate each incident on an individual basis to determine whether or not to issue a replacement card. Card Cancellation - If a school/department wishes to cancel a card, the P-Card Manager should submit a request to the PCA. The P-Card Manager must destroy any cancelled card(s). If there is an urgent need to cancel a card, contact the PCA for immediate assistance. Remember that lost or stolen cards may be reported directly to the bank through a 24-hour toll-free telephone number. Send P-Card to PCA. Card Changes - If the school/department wishes to change any aspect of a P-Card, including address, default index sub-object, and card limits, the P-Card Manager should submit card changes to the PCA via email. If requested changes affect several cards, contact the PCA to determine the best method to forward the change request. CCBOE Website - Information regarding the P-Card Program, including relevant forms and contact information, is available on CCBOE s website under staff services. - 18 -

BANK STATEMENTS Cardholder Activity Statements Bank of America statement of cardholder activity will include the account information, payment information, account summary, transactions for the month and the total activity for the month. Use this statement to reconcile the P-Card Transaction Log. A copy of the statement should be signed by principal/cardholder and forwarded to the P-Card Manager along with the P-Card Transaction Log and the documentation for the transactions. Company Statement - Bank of America sends two statements. One is the Cardholder Activity statement and the second is the Company Statement. If a school or department has multiple cardholders attached to the group, then this statement will give a summary of each card on this statement. This statement should be kept at the school and not sent to Accounting. FRAUD AND MISUSE Deterrence-The department is responsible to actively protect each of its P-Cards from fraud and misuse. Prevention efforts may be further enhanced when these guidelines are followed: Limit Card Access - Maintain cards in a locked environment, when possible. Limit access to this environment to provide greater security for the card. Consider card security prior to allowing an employee access to a P-Card or P-Card number, particularly if the employee is temporary or seasonal. CCPS will authorize only full time employees who are not under the probationary period to be cardholders. Protect P-Card Information - In addition to protecting the P-Card; protect all card information such as the card account number, name, and expiration date. File reports that contain card numbers in locked file cabinets. When discarding reports or other paperwork containing card information, shred documents. Assure security of card materials that are maintained electronically. Establish reasonable card limits - Establish reasonable spending and transaction limits. This will limit risk in the event the card or card number is lost or stolen. Perform Weekly Reviews - Performing weekly reviews of all card activity will reveal transactions that do not belong to the school/department, or that might be of a fraudulent nature. Maintain Adequate Separation of Duties - Divide the card custodian and the accounting/reconciliation duties among employees. Conduct upper management review of weekly transaction reports and supporting receipts and associated documentation. Occurrence of Fraud or Misuse - If fraud or misuse is suspected, the Program Manager should contact the PCA immediately for further guidance. When appropriate, the PCA will refer the issue to the appropriate Internal Audit Team. If fraud is confirmed, the department Program Manager will be advised to report the incident to the following: Charles County Police Department, Financial Crimes Division. Department of Finance, Assistant Superintendent for Finance, Business Administration & Technology. Purchasing Department - 19 -

COMPLIANCE REVIEWS The P-Card program is subject to review by the Purchasing Department, the Department of Accounting, and both internal and external auditors. P-CARD PROCEDURES AND TIMELINE FOR PROCESSING DOCUMENTATION School Staff Complete the P-Card Transaction Log (P-Card Log) form with the date, merchant name, description of purchase, purchase amount and account code to be charged. The completed P-Card Log must be signed (cardholder and manager). Documentation for all purchases must be attached. For conferences include agenda from conference. For business meals - include the purpose for the meals and number of personnel who attended meal. The amount of the meal should not exceed the per diem amount for the area and meal. Bank of America Statement (signed by cardholder and manager) verifying that amount on statement is equal to amount on P-Card Log. If statement has not arrived by the deadline to submit the log and documentation, then print out the billing statement spreadsheet for the month through the Report section of Works and request that the principal or cardholder signs off on the spreadsheet. When the statement arrives, request that the principal or cardholder signs off and submit to the School Administration Office. The total amount on the statement/spreadsheet and the total on the log form must be the same. Department Staff Complete the P-Card Log with the date, merchant name, description of purchase, purchase amount and account code to be charged. The completed P-Card Log (signed by cardholder and manager). Documentation for all purchases must be attached. For conferences include agenda from conference. For business meals - include the purpose for the meals and number of personnel who attended meal. The amount of the meal should not exceed the per diem amount for the area and meal. Bank of America Statement (signed by cardholder and manager) verifying that amount on statement is equal to amount on P-Card Log. If statement does not arrive on time, print out the monthly statement as a Works report and sign off on the spreadsheet. The statement/spreadsheet total and the P-Card Log form total needs to be the same. Executive Staff Complete the P-Card Log form with the date, merchant name, description of purchase, purchase amount and account code to be charged. The completed P-Card Log (signed by cardholder and manager). Documentation for all purchases must be attached. For conferences include agenda from conference. For business meals - include the purpose for the meals and number of personnel who attended meal. The amount of the meal should not exceed the per diem amount for the area and meal. Bank of America Statement (signed by cardholder and manager) verifying that amount on statement is equal to amount on P-Card Log. Timeline for Submission of Log, Documentation and Bank Statement Cardholder has from 1 st to 10 th of following month to: create log sheet and sign off on log sheet, review and sign off on bank statement, - 20 -

CHARLES COUNTY PUBLIC SCHOOLS Note/change account number in Works and sign off transaction in Works and send documentation, bank statement and log sheet to supervisor. Manager has from 11 th to 20 th of following month to: review log sheet and sign off on sheet, sign off on bank statement and review Works transaction with log sheet, correct any account number changes and send signed log sheet and bank statement to Accounting. Accounting has from 21 st to 30 th of the following month to: review log sheet and statement, review transactions, and make any corrections in Works, and close the transactions, and post board/grant expenses in General Ledger. WORKS PROCEDURES When you have your receipt for the purchase and want to sign off as a cardholder, first log into Works. Keep track of your username and password and safeguard this information. You will be asked to change the password periodically by Bank of America. If you forget your password, click on Forgot your password? and the password will be given to you via your e-mail. You can also contact the Program Administrator at extension 7340 or the Alternate at 7355. They will be able to change your password to your user name. Once in Works, you will need to change your password. Make a note of your new password. Figure 1 21

Transactions in Works - Most cardholders and managers will see the below screen when they log into the Works website. Whenever you want to get to this screen click on the little house (first arrow). In this screen you have two sign offs. This particular user has cardholder and manager sign off capabilities. Keep in mind, that if you have two cardholders who can sign off on a transaction, (principal and secretary) and the principal signs off on the transaction first, the secretary will not be able to change the account number on the transaction if it is needed. Figure 2 Split Screen and Table - When you click on a sign off for cardholder, the transactions waiting to be signed off will appear. On the red ribbon, off to the right are three circles, Table, Split Screen and Detail (see Figure 3). Clicking on each circle will change the view of the transactions. Table Screen This view can be used to sign off multiple transactions at one time where all accounts are correct. Split Screen Figure 3 is in split view. In this view more details on the transaction can be viewed by clicking on the tab on the top of the bottom section: o General - Sales tax charged can be viewed. o Allocation In this view, the account code can be changed, multiple codes can be made charge to the transaction. o Purchase Detail If the merchant is a level 3 merchant, individual items on the transaction can be viewed. Merchants such as Lowes, Amazon, Target and Safeway are Level 3 merchants. o Signoff History The employees who signed off on the transaction can be viewed as well as date signed off. o Merchant Detail Name, address and phone number for the merchant. o Dispute If a transaction is in dispute, then any information can be viewed in this tab. Detail - Only the bottom half of the split screen will be shown. Changing Account Number on a Transaction - Once in Works, you will need to look at the transaction and make sure that the account number under allocation is correct. If it is not, you 22

must change the account number to the correct account. All board fund school accounts are set as a default of 001.03.210.7323.XX. To change the account, do the following: Select split Screen Click on Allocation Figure 3 Highlight the transaction to be changed by clicking the transaction with your mouse. Then make sure that the transaction is in Split View mode (click on the upper right in the red ribbon). You will get a screen similar to Figure 3. Click on Allocation on the bottom split screen and then Figure 4 click on Edit on the bottom left corner of the bottom view. You will then see screen similar to Figure 4. You can then change the account number allocated to the transaction by filling in the boxes with the correct account. 23

CHARLES COUNTY PUBLIC SCHOOLS Once the correct account is entered, click save (bottom right button on the bottom screen). Signing Off on a Transaction - Once the account is correct and the amount is correct, Sign Off on the transaction by highlighting the transaction and clicking on the button on lower left of screen (yellow button). See Figure 5 Figure 5 Sign off If you want to add a comment put it in the comment box, if not, just click o.k. Figure 6 24

Multiple Account codes for Transactions Find the transaction on Works that needs to distributed to multiple codes. Double click on the transaction. You will get a split screen. Click on the tab Allocation Click on the bottom left of the split screen marked Add/Edit Click on the Percentage box on the upper right marked Percentage You will see that the percentage opposite the Description is now marked with 100%. See below. On the upper right you see and Add with a 1. If you only want to add one line to the transaction, leave it alone and click Go. One line will be added and you can then allocate the amount to each line. Make sure that all amounts have been distributed by looking at the bottom right. There will be a variance if all amounts have not been distributed. Once you have the allocation you want, and there is no variance, then click o.k. and you are done. If you want two lines added, click 2 in the Add box and repeat the above instructions. If you made a mistake and added too many lines, you can click on the trash can on the right of the merchant name. And then click o.k. 1. Add 1 to get another set of boxes to add an account number. 2.Click Go Figure 7 25