Commercial Card Cardholder Policy
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Document Number: BUSF--102
Revision #: 2.0
Document Owner: University Provost
Date Last Updated: 12/12/2017
Primary Author: VP of Business and Finance
Status: Approved
Date Originally Created: 10/07/2011
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Description: The Commercial Card Program is designed as an alternative to a variety of processes including petty cash, check requests and low dollar purchase orders. The Commercial Card Program is not intended to avoid or bypass appropriate purchasing policy. Rather, the Program complements the existing processes available. The card is a MasterCard credit card that is issued by JP Morgan Chase. Some record keeping is essential to ensure the successful use of the Commercial Card. The recordkeeping requirements are the same as standard payment policies that require retention of original invoice/receipts, etc. The Commercial Card Program is designed as an alternative to a variety of processes including petty cash, check requests and low dollar purchase orders. The Commercial Card Program is not intended to avoid or bypass appropriate purchasing policy. Rather, the Program complements the existing processes available. The card is a MasterCard credit card that is issued by JP Morgan Chase. Some record keeping is essential to ensure the successful use of the Commercial Card. The recordkeeping requirements are the same as standard payment policies that require retention of original invoice/receipts, etc.
Purpose: The Commercial Card program is intended to streamline and simplify the Purchasing and Accounts Payable functions by eliminating waste and low value activities. The Commercial Card is a tool that reduces transaction costs, facilitates timely acquisition of materials and supplies, automates data flow for accounting purposes and offers flexible controls to help ensure proper usage.
This Cardholder Guide provides information about the process, the types of purchases that can and cannot be made, records that must be maintained and reconciled for each cycle, and a variety of other Program information.
Scope: All Departments and/or Department heads
Exceptions: The following are exceptions to this policy:
Please remember that you are committing company funds each time you use the Commercial Card. This is a responsibility that should not be taken lightly. Remember that you are the person responsible for all charges made to the card(s) which has been issued to you. Intentional misuse or fraudulent abuse may result in disciplinary action up to and including dismissal.
The card will have no impact on your personal credit. Although the card lists an individual's name, the card is actually issued to Cumberland University.
Responsibility: President
VP of Business and Finance
Managers of budgets are responsible for the oversight of the spending using the Commercial Card system while the VP of Business and Finance and the President have ultimate authority over the acceptable use of these Cards.
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Requirements
Approvals: Only regular employees of Cumberland University are eligible to receive a Commercial Card. Contractors or temporary employees are not eligible. The cardholder is responsible for the security of their card(s) and the transactions made against the card(s). Each user will be required to sign the Commercial Card Cardholder Agreement as part of the Commercial Card application.
Relevant Knowledge: In order to comply with this policy you should know:
Current University policy
Standards of good practice
Standard company policies
Terms and Definitions: Additional training
Corrective Action
Loss of University privileges without ID
Suspension
Termination
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Policy Provisions
1. Introductory Information About Cardholder Responsibilities
After you have read this Cardholder Guide and understand the procedures outlined, you must complete all of the requirements of the Commercial Card application form. If an application package is not attached to this guide, contact your local site Commercial Card Administrator/Accounts Payable for a copy. As part of your application, we will identify which levels of transactions and cycle spending limits best accommodates your business requirements. When you receive your Commercial Card(s), sign the back of the card(s) and always keep it in a secure place. Although each card is issued in your name, it is the property of Cumberland University and is only to be used for company purchases as defined in this guide.
Only regular employees of Cumberland University are eligible to receive a Commercial Card. Contractors or temporary employees are not eligible. The cardholder is responsible for the security of their card(s) and the transactions made against the card(s). Each user will be required to sign the Commercial Card Cardholder Agreement as part of the Commercial Card application.
2. Commercial Card Restrictions
2.1 Purchases are limited to $500 or less for the total transaction.
2.2 The Commercial Card is NOT to be used for:
2.2.1 Personal purchases or cash advance
2.2.2 Office supplies or equipment in excess of $25.00 due to the discounts we receive via current vendors.
2.2.3 Cell phones, pagers or computer equipment.
2.2.4 Books or other merchandise for individual students.
2.2.5 Any other purchase prohibited by CU policy as stated in the CU handbook.
2.3 Under no circumstances should a transaction be split into two separate receipts to bypass the single transaction dollar limit.
2.4 Each card will have a maximum amount per billing cycle. This amount is determined by your department need with approval from your supervisor. Once set, the card will reject purchases for amounts greater than the limit. Limits may be changed by processing the change form with your Commercial Card Administrator/Accounts Payable. Limit changes require the written approval of your supervisor.
3. Using the Card
3.1 Purchases within the approved parameters are initiated using your assigned card. Contact the supplier and agree to price, quantity, sales tax/exempt and delivery date. It is required at the time of purchase that you receive an original detail receipt showing amounts paid for the purchases. If the purchase is via phone or mail, ask the supplier to include the original receipt with the goods when the product is shipped to you. The Cardholder's name and "MasterCard" must appear on the packing slip and external shipping label. The supplier will require your Commercial Card number, expiration date and the "ship to" address as well as the sales tax exemption number.
3.2 It is required that you retain ALL ORIGINAL DETAIL receipts for your purchases.
3.3 Commercial Card Abuse: Abuse of the Commercial Card may result in revocation of the Card and appropriate disciplinary action which may include termination of employment. Policy violations include, but are not limited to:
3.3.1 Purchasing items for personal use
3.3.2 Failure to obtain sales tax exemption
3.3.3 Exceeding bank credit line limit or splitting transactions to fall within the transaction limit
3.3.4 Failure to return the Commercial Card when reassigned or upon request
3.3.5 Failure to submit proper documentation and Transaction Log to Accounts Payable timely
4. Conflict of Interest
4.1 Purchases of goods or services from an entity with which the cardholder or cardholders’ immediate family has more than a 5% interest must be disclosed to the supervisor and/or the Vice President for Finance and approved prior to making a purchase.
5. Tax
5.1 State sales tax is exempt on purchases in TN. The TN state sales tax number is shown on the purchase card. We also have sales tax exemptions in the states of MS, KY and FL. Please contact accounts payable for those tax exemption certificates before purchasing in those states.
6. Reconciling Your Account(S)
6.1 Monthly, each cardholder will receive a statement(s) (cycle cut-off date is the 4th of each month) identifying each transaction made against the Commercial Card during the billing cycle. The statement must be reconciled against your retained receipts for accuracy.
A Monthly Transaction Log must be used as a tool to help maintain purchase information and to help reconcile your account(s). This Log is mandatory for all users. This form is located on the P-Drive in the Purchase Card folder and in the file named PCard Transaction Log. All receipts must be securely taped to an 8 ½ x 11 blank sheet of paper in date order.
The statement and monthly transaction log (with attached receipts) must be signed by the cardholder as proof of reconcilement and then forwarded to your supervisor for approval. After proper approval the following should be forwarded to the Accounts Payable Department: (1) the original monthly statement with proper approvals; (2) the Transaction Log (3) the original receipts. A standard envelope may be used for monthly filing of the statement and receipts and may be sent via campus mail or US mail to the attention of accounts payable. Each account must be reconciled and sent to Accounts Payable by the 15th of the subsequent month.
7. Resolving Errors and Disputes
7.1 In the case of an error, first contact the supplier and try to reach an agreement. Most disputes can be resolved between you and the supplier directly.
If you are unable to reach an agreement with the supplier, complete a Dispute Form (located on the P-Drive in the Purchase Card folder and in a file named PCard Dispute Form), sign it and send it to Accounts Payable. Accounts Payable will send to JP Morgan Chase. All disputes must be submitted in writing to Accounts Payable within 45 days.
8. Paying the Bill
8.1 The Commercial Card is a corporate pay arrangement. Account balances will be paid in full each month by a direct charge to a Cumberland University bank account.
Your purchases will be charged to your advance account until your monthly reconciliation of your account along with approved original detail receipts is received. Monthly charges that are not approved are subject to become your personal responsibility via payroll deduction.
9. Lost or Stolen Cards
9.1 The Commercial Card(s) should be secured, just as you would secure your personal credit cards. If your card(s) is lost or has been stolen, immediately contact JP Morgan Chase via this toll free number (1-800-316-6056). Also notify Accounts Payable, Ext. 1163 immediately via voice mail.
10. Refusal of Card or Account
10.1 Should you be declined at the point of sale for any reason, please contact Accounts Payable during regular business hours. If your card is declined after business hours and you must use it before regular business hours resume, you may contact the Vice President for Finance at 308-7731. Every effort will be made to determine why the transaction was declined.
11. Departmental Changes
11.1 If you transfer to a new department or leave the University, notify Accounts Payable immediately.
12. Commercial Card Audit Activity
12.1 Your card activity is subject to random audits by appropriate personnel, including our external Auditors. The random audits are to help ensure adherence to the Program's policies and procedures.
13. Merchants That Do Not Accept the Card
13.1 Merchants are to be encouraged to become involved in the Commercial Card Program so that you can use the Program most effectively. Merchants may contact their local bank or financial institution to become credit card capable. For those merchants that are unwilling to participate in the Program, alternative sources should be found. You may also contact Accounts Payable with any merchants you would like to accept the card.
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Performance Evaluation
Desired Outcome: All Commercial Card purchasers will follow protocol.
Performance Metrics: Compliance with standard policy and procedure
Consequences: Criminal Prosecution
Further training
Job Termination
Loss of privileges
Suspension
Write-Up
Loss of pay
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Subject Experts
The following may be consulted for additional information.
VP for Academic Affairs
Executive Director of Facilities and Safety
VP of Business and Finance