Part 1: Authority. Minnesota State System Procedure 7.3.3 is in effect at Lake Superior College (LSC) as well as additional criteria defined in this procedure.
Part 2: Purpose. Purchasing cards provide the college with a cost-effective, convenient, and streamlined method of purchasing items, thereby reducing the volume of individual vendor payments processed by the college. Reports on cardholder activity enable the College to capture information necessary to better manage institutional purchasing activities.
Part 3: Definitions
Subpart A: Purchasing Card. The terms purchasing card, pCard, and credit card are used interchangeably with no difference in procedures. Purchasing card means either an individual card or fleet card, as described below.
- Individual Card. An individual purchasing card is a card in the name of the College and in the name of a college employee in which the institution is liable to the card issuer for all charges.
- Fleet Card. Fleet card means a purchasing card in the name of the College assigned to a specific college-owned or –leased/rented vehicle (including airplane) in which the institution is liable to the card issuer for all charges. A fleet card may be used for appropriate vehicle-related purchases by any individual authorized to use the vehicle to which the card is assigned. Vendor specific gasoline cards are prohibited.
Subpart B: Cardholder. Cardholder means a college employee who is issued an individual card and has agreed to abide by these procedures. Contractors, contract employees, and student employees are ineligible to be cardholders but may be authorized to use fleet cards.
Subpart C: Card Administrator or Coordinator. The business services office staff who coordinates the purchasing card program for the college and acts as the College’s intermediary in correspondence with the card issuer.
Part 4: Procedures for Obtaining a Purchasing Card
Subpart A: Procedure
The Vice President of Administration is responsible for approving employees for participation in the purchasing card program.
No retail store or vendor-specific cards or accounts are permitted.
LSC has established procedures and forms for implementing and monitoring the purchasing card program that include, but are not limited to, the following:
- A dollar limitation on the purchasing card;
- A dollar limitation of purchasing authority assigned to the cardholder per transaction made with the individual purchasing card;
- A dollar limitation of purchasing authority assigned to the individual cardholder for the total of all charges made during each monthly billing cycle;
- Merchant category blocking.
Subpart B: Encumbrance. Funds must be encumbered on a purchase order prior to incurring the obligation according to the College’s purchasing procedures. The purchase order(s) to the purchasing card are to be for the item(s), cost center(s) and object code(s) to be charged.
Subpart C: Delegation of Authority. Each cardholder must be specifically delegated the authority to obligate the college to a specific dollar limit of the purchasing card. This delegation must be on the Minnesota State Delegation of Authority form and approved by the College President.
Part 5: Authorized Card Use
Purchasing cards may be used to purchase eligible merchandise or services required in association with the duties or responsibilities of the cardholder or fleet card user. Unauthorized and inappropriate card use is addressed in Part 6 of this procedure.
A purchase made with a purchasing card may be made in-store, by U.S. mail or by electronic means such as telephone, fax or internet.
A limited number of designated purchasing card holders may purchase electronic equipment (computers, projectors, etc.) with the purchasing card; this is limited to the Purchasing Agent, Director of Business Services, Vice President of Administration, Director of Computer Services, and Director of Information Technology. A separate purchase order using the correct equipment object code(s) is required to ensure the equipment is added to the inventory module.
Part 6: Unauthorized and/or Inappropriate Card Use
Purchasing cards must not be used to purchase items for personal use or for non-college purposes, even if the cardholder or fleet card user intends to reimburse the College.
A cardholder or fleet card user who makes an unauthorized purchase with the card or uses the card in an inappropriate manner may be subject to disciplinary action, up to and including termination, as well as revocation of the purchasing card, criminal prosecution, and restitution of the unauthorized use. The Vice President of Administration and/or the President will determine the appropriate consequences.
Subpart A: Prohibited Use
Cards are not to be used for purchases in the following categories:
- food and beverages for an individual employee;
- alcoholic beverages;
- cash or cash advances;
- items for personal use;
- employee relocation expenses;
- travel expenses required to be reimbursed under System Procedure 5.19.3, Travel Management (including gasoline for personal vehicles);
- sensitive items as defined in System Procedure 7.3.6, Capital Assets, except as provided in Part 5 above;
- items for non-college purposes;
- purchase of equipment requiring asset tags and inventory tracking (fixed assets, computers, projectors, etc.) except as provided in Part 5 above;
- entertainment and recreation (except as provided in Subpart B below); or
- purchase of services or contracts for services (unless approved in advance by business services office).
Subpart B: Use Allowed Only When Specifically Authorized
Specifically authorized and designated cardholders may execute purchases listed in this subpart that comply with applicable system or college procedures, and any applicable grant agreement. Where required by applicable system or college policies and procedures, prior approval must be granted, and other applicable forms (e.g., out of state travel, special expense, etc.) approved, before executing the purchase.
- Travel-related expenses (by cardholder). An authorized card may be used for all travel-related expenses of the cardholder except food and beverages. Examples of allowable expenses include: airfare, baggage fees, room and related taxes, vehicle rental, gasoline for a rented vehicle, and parking while in travel status.
- Travel-related expenses (for persons other than cardholder). Authorized cards may allow for a cardholder to make arrangements for transportation or lodging for another individual or group of individuals.
- Food and nonalcoholic beverages for members of athletic teams.
- Food and nonalcoholic beverages for student activities, including travel, which will be paid for with student activity funds in compliance with system and college procedures.
- Food and nonalcoholic beverages for business meetings. Parameters for food and beverages at business meetings are set out in system and cLSC Procedure 5.20.1.
- Food and nonalcoholic beverages that will be paid for with grant funds if allowed by a grant agreement. This may include employees in travel status when traveling with a group of students on grant funding. In these cases, the employees will not submit any reimbursement for meals.
- Conference and seminar registration.
- Entertainment and recreation. Use of purchasing cards for entertainment and recreation is prohibited except that authorized cards may allow for entertainment and recreation purchases for
- student activities that will be paid for with student activity funds;
- activities that will be paid for with grant funds as authorized by the grant agreement; or
- academic activities that will be paid for with course fees.
Subpart C: Gasoline and Vehicle Related Expense
A fleet card may be used only to pay for vehicle expenses related to the specific college-owned or leased/rented vehicle to which it is assigned. All merchant types other than service stations are blocked from card usage. No personal use is permitted.
A driver or pilot authorized to use a fleet card is personally liable for any unauthorized use of the fleet card made during the time the driver or pilot is authorized to use the vehicle.
Subpart D: Late Fees and Finance Charges
- Late fees which occur because the cardholder did not submit a monthly statement and required documentation to the business services office in a timely manner are the responsibility of the cardholder.
- If the cardholder made the purchase for another college staff member who does not have their own purchasing card, the staff member not supplying the required receipts or documentation will be charged the late fee or finance charge instead of the cardholder.
- Late fees or finance charges must be reimbursed to the College within one billing cycle from the date of the late fee or finance charge. Reimbursement may be made by cash or personal check to LSC at the business services office.
- If payment owed by a cardholder is not received within one billing cycle, the card will be canceled and no new card will be issued until the fees and finance charges have been paid in full.
Subpart E: Returns and Exchanges
- If any item purchased with a purchasing card is unacceptable or not allowable, arrangements must be made for a return for credit or an exchange whenever feasible.
- A cash refund or check is prohibited unless the vendor insists that a refund must be by cash or check. In such cases, the funds must be deposited immediately with the college business services office. If a refund is issued in the form of a check, the check must be payable to the College.
Part 7: Responsibility and Accountability
Subpart A: Cardholders and Fleet Card Users
Each individual cardholder or fleet card user has the following responsibilities:
- Safeguard the purchasing card and card account number at all times.
- Lost or stolen purchasing cards must be reported immediately to the credit card company and the business services office.
- Keep purchasing card in a secure location at all times.
- Do not allow anyone else to use the purchasing card or card account number.
- Obtain and retain original itemized receipts for all purchases.
- All forms of canceled checks and copies of purchasing card bills do not substitute for original receipts.
- A card user may file an Affidavit for Expense in lieu of a receipt if the original receipt is lost or a receipt is not obtained.
- All credits, including returns, must be documented with itemized receipts referencing the original purchase and purchase date.
- In a timely manner, review individual card monthly statements for accuracy and ensure all transactions posted are legitimate transactions made by the cardholder.
- Match each transaction with a PO number.
- Original receipts or packing slips and the customer’s copy of the charges must be attached to the monthly statement. These need to show a detail of the items purchased, not just the total.
- Cardholder must sign and date the statement that the items have been received or the purchases made.
- Special Expense forms, Out of State Travel forms, agendas, etc. must be attached as required by purchasing procedures.
- A time period of five days is considered a timely review and submission.
- Submit the signed and dated individual card statement and documentation to supervisor for approval.
- Statements must reach the business services office no later than the 21st of each month for payment processing.
- Statements are available online on the first full business day following the 8th of each month. An email notification may be set up for when the statement is ready online.
- Surrender the purchasing card and corresponding support documentation to the business services office prior to separation from the College or as otherwise requested.
- Take any other steps necessary to ensure that the purchasing card is used only for authorized purposes.
Subpart B: Supervisors
The supervisor of a cardholder is responsible for reviewing cardholder expenses and ensuring compliance with these procedures. Supervisors’ duties include:
- Review purchases to ensure they meet objectives and are within restrictions placed on the card.
- Ensure all required documentation, including any credits, is attached.
- Review purchases to ensure card has not been used for unauthorized or inappropriate purchases.
- Do not sign approval until all charges are documented correctly.
- Submit the signed and dated statement directly to the business services office; do not return to the cardholder to submit for payment.
- Respond to any misuse of the card by cardholder.
- Ensure supervisor or other back-up approver is available in case of absence.
- Ensure closure of purchasing card at time of employee’s separation from employment or removal of purchasing card authority.
Subpart C: Audit. The College business services office shall conduct periodic reviews for proper card use. Purchasing card records are subject to audit from time to time.
Part 8: Exceptions. Any exceptions to these procedures must be approved in advance by the Director of Business Services or the Vice President of Administration.
Date Implemented: December 18, 2014