| American Express Corporate Purchasing Card |
| Instructions |
| Introduction |
| Policy |
| Card Issuance,
Cancellation and Changes |
| Purchasing Card Security |
| General Requirements for
Card Use |
| Return, Credits and
Disputed Items |
| Charge Card Statement
Reconciliation |
| Charge Card Statement
Payment Guidelines |
| Management Information Reports |
| 1099 Reporting |
| Preferred Supplier Guide |
| Internal Control |
| Instructions
Specific to Virginia Military Institute |
| Introduction
Purchasing charge cards (purchasing cards) offer State agencies and
institutions an alternative payment method when making small purchases as well as the
opportunity to streamline their local procedures or controls for procuring goods and
services. The purchasing card program reduces the volume of accounts payable
transactions and the associated administrative costs by eliminating vendor invoices and
consolidating multiple vendor payments into one monthly payment to the charge card vendor.
Vendors are paid directly by the charge card vendor. Management information
reports are available to assist agencies in maintaining control over purchases and
payments.
The purchasing charge card is accepted by vendors that accept the
American Express (AMEX) card. Additional point-of-sale information is available in
management information reports when the purchasing card is used with vendors that are
listed in the Preferred Supplier Guide. |
| Policy
The current small purchases $2,000 per charge. Agencies
are liable for authorized charges made using the card. Purchasing cards
must be used for official Commonwealth of Virginia purchases only. Use of the card
for personal items, cash advances and business travel expense is not permitted.
Efforts should be made to use vendors who accept the purchasing card where appropriate in
order to maximize administrative cost savings. If you have questions on the
appropriate use of the purchasing card, please contact the agency's Purchasing Card
Administrator (Program Administrator).
The Procurement Director or designee at each agency acts as the
agency's Program Administrator (PA). This person is responsible for card issuance,
card cancellation and communicating to the charge card vendor who, within the agency,
receives the cards, monthly billings, additional statements and management reports. |
| Card
Issuance, Cancellation and Changes
Purchasing card services must be obtained through participation in the
Statewide contract administered by the Department of Accounts in conjunction with the
Department of General Services, Division of Purchases and Supply (DPS). The agency
Program Administrator is the liaison between the agency, Department of Accounts, DPS and
the charge card vendor, AMEX. The agency PA should contact AMEX's Commonwealth of
Virginia Inside Service Representative at (804) 225-2382 to begin participation in the
purchasing card program. AMEX will provide the necessary literature and training to
the agency.
Purchasing cards will be issued to individuals who have appropriate
purchasing authority. They are issued with the name of the cardholder and the
cardholder's agency name embossed on the front. Cardholders must sign an employee
agreement form prior to obtaining the purchasing card.
AMEX card will be issued to Institute personnel after the
completion of training in the use of the charge card. The training will be conducted
by representatives from the Purchasing Office and the Comptroller's Office.
The purchasing card has three fields reserved for accounting coding and
other special needs. The three fields are the Universal Field (25 characters) the
Cost Center Field (10 characters) and the Employee ID field (10 characters). These
fields are kept on the AMEX cardholder's database and appear on every transaction.
The fields can be populated with agency accounting data to help in automating the
accounting process. The first three characters of the universal field must contain
the cardholder's agency number. The remainder of the fields are available or use by
the issuing agency.
Use of the purchasing card is limited to transactions of $2,000
or less. Agencies may choose a lower limit. The agency may elect from
among the following additional restriction on purchasing cards:
Dollar limits per transaction: This limit
allows agencies to designate the maximum dollar amount allowed for Cardholders to spend on
each purchase or transaction. At the point-of-sale, AMEX's Credit Authorization
System (CASE) verifies that the purchase amount falls within the approved transaction
limit. If the amount requested for authorization exceeds the limit, the
authorization is denied. (Maximum of $2,000)
Dollar limits per cardholder: This limit
allows agencies to designate the total amount an employee can spend during the monthly
billing cycle. A running balance is maintained in CAS that increases with each
authorized charge until the Cardholder reaches the assigned monthly limit. It the
limit is reached before the end of the billing cycle, new attempts for authorization are
denied. (Maximum of $100,000 per billing cycle)
Budgetary limit: The budgetary limit differs
from other spending limits in that it is not specific to an individual Cardholder.
Budgetary limits are assigned to groups at the control account level and affect al Cards
reporting to that control account. It cannot be set at more than one level in the
hierarchy. If a budgetary limit is set at the basic control level, the agency can
not have another budgetary limit at the intermediate control that includes the same basic
control.
Industry Restrictions: Agencies can set
industry restrictions based on merchant industry codes. The restriction enable
agencies to more accurately target industries from which agencies purchase high volume,
low cost commodities used for maintenance, repair and operation of the agency. An
example of an industry restriction is the blocking of retail vendors using the merchant
industry code.
Preferred supplier restrictions: This feature
helps agencies manage relationships with preferred suppliers by restricting Cardholder
spending to select merchants. Agencies can also use this feature to improve
management information by establishing preferred relationships with suppliers that can
provide enhanced data capture. Enhanced data capture allows accounting or other
information to be added at the point of sale.
Dual Card limits: Dual card limits is a
variation of Preferred Supplier Restrictions. With Dual Card Limits, the agency may
elect to have a higher transaction limit for Preferred Supplier transactions and a
separate lower limit for "all other" transactions.
Cardholders must return the purchasing card to the agency Program
Administrator immediately upon request or upon termination of employment.
The agency PA must be contacted when changes need to be made to
existing purchasing cards. If a new purchasing card needs to be issued, the
cardholder should receive the replacement card in 7-10 business days. |
| Purchasing
Card Security
Authorized use of the purchasing card is limited to the person whose
name appears on the face of the card. The purchasing card must not be loaned to
another person. Once the card is loaned to another person that person becomes an
authorized user and any charges made by that person are considered authorized.
The purchasing card should be kept in an accessible but secure
location. the account number on the purchasing card should not be posted or left in
a conspicuous place.
The account number must not be faxed to vendors.
If the purchasing card is lost or stolen, the cardholder must
immediately notify the agency's Program Administrator and AMEX.
The Commonwealth of Virginia is liable for the use of the purchasing
card by authorized users, provided that use is within the single per transaction dollar
limit not exceeding $2,000. The Commonwealth does not accept liability for the
following: |
- Unauthorized use of the purchasing cards.
- Account numbers that are fraudulently used.
- Account numbers that are fraudulently used.
- Purchases made with stolen or lost cards that are beyond the maximum limit of $50 and
the maximum length of liability of 24 hours after discovery and reporting of card loss or
theft.
|
| General
Requirements for Card Use
Agencies must establish written procedures for use of the purchasing
card. Cardholders must maintain a log of their purchases so spending limits can be
monitored and purchasing activity can be reconciled to the monthly charge card statements.
A new purchasing log must be established at the beginning of each new billing
cycle. To use the card the cardholder should: |
| Step |
Action |
1 |
Identify a vendor that sells the goods and services needed. A Preferred
Supplier Guide available from your agency's Program Administrator. This Guide
lists vendors who currently accept the purchasing car. (See "Payment of the
Charge Card Statement," for more information about the Preferred Supplier Guide.) |
2 |
Call, go on-line (must comply with DPS' E-Commerce Policy), or go tot he
vendor's place of business and place the order. Provide the vendor with specific
point of sale information that the agency wants to capture for reconciliation purposes
(such as a transaction control number). |
| 3 |
Give the vendor the account number and expiration ate on the purchasing
card. The vendor will verify the account number with AMEX. The spending limit
will be checked electronically for compliance with applicable limits. |
| 4 |
Retain all documentation pertaining to the purchase. When the vendor
delivers the order, documentation of the purchase (such as a sales receipt or packing
slip) should accompany the order. This reconciliation to the charge card statement. |
| 5 |
Enter the purchase information in the cardholder's purchasing log.
Purchasing logs should be designed to meet the needs of the agency. The log should
contain, but not be limited to, the following information:
- Agency name and unit
- Cardholder name
- Account number of purchasing card
- Date of purchase
- Vendor name
- Description of purchase
- Amount of purchase
- Point-of-sale information give to vendor (e.g., a control number of each specific
transaction)
- Object code
|
| Returns,
Credits and Disputed Items
In most cases, disputes can be resolved directly between the cardholder
and the vendor that provided the goods and services. The cardholder must use the
following guidelines when returning an item: |
| Step |
Action |
| 1 |
If an item needs to be returned for any reason , the
cardholder should send the item back to the vendor in the manner agreed upon. |
| 2 |
The vendor should issue a credit for items that are
returned. This credit will appear on a subsequent charge card statement. |
| 3 |
Documentation of the return (such as a credit receipt) should
be issued by the vendor. All documentation pertaining to returns must be kept on
file for reconciliation to the charge card statement. |
| 4 |
The return should be entered in the cardholder's
purchasing log. |
| 5 |
If the cardholder and the vendor cannot resolve an issue, the
cardholder should contact AMEX (phone number on back of card). American Express will
investigate the dispute on the cardholder's behalf and assist in the resolution. A
temporary credit will be issued pending final resolution. |
| Charge
Card Statement Reconciliation
The agency is responsible for retaining documentation for retaining
documentation of purchases and returns and reconciling them, with the aid of the
purchasing log to the monthly charge card statement. The following guidelines are
recommended for reconciliation: |
| No |
Reconciliation Guidelines |
| 1 |
Each cardholder receives a monthly charge card statement that should be
compared to the purchasing log to verify that purchased and returns are accurately listed
on the statement. |
| 2 |
All documentation pertaining to purchases and returns must be matched with
the charge card statement. |
| 3 |
Discrepancies should be noted on the purchasing log for subsequent
resolution. |
| 4 |
The charge card statement and a form certifying receipt of all purchases
and returns should be forwarded to the accounting department within a time frame agreed
upon by the purchasing unit and accounting unit. The certification form must be
signed by the cardholder and the cardholder's supervisor. |
| 5 |
All supporting documentation pertaining to the purchases and returns on
the statement should be kept on file by the cardholder with the purchasing log until
disposition in accordance with agency policies. |
| 6 |
Payment can be made before the statement is reconciled, but reconciliation
must occur prior to receipt of the following month's statement. |
Card
Statement Payment Guidelines
The agency's accounting unit is responsible for processing payments to
American Express. The following guidelines must be observed when processing payments: |
| No. |
Payment Guidelines |
| 1 |
One consolidated invoice for all purchasing cards within each
organizational unit specified by the agency, or the entire agency will be mailed by
American Express to each agency following the billing cycle cutoff. |
| 2 |
The payment due date is established by the terms of the contract with
AMEX. American Express must receive payment on the 17th of each month.
Do not adjust due date for holidays or weekends. Example: I f the charge card
billing cutoff date is 5/20/99, the due date is 6/17/99. (Payments to American
Express will be deposited into their bank account on 6/17/99 by Financial EDI.) |
| 3 |
AMEX's taxpayer identification number (TIN) must be used as the vendor ID
on the accounting voucher. The vendor suffix for the purchasing card is00. All other
payments such as travel card or discount fees, to AMEX must use a vendor suffix other than
00. If a payment is erroneously coded to SPCC contact AMEX's Account Receivable unit
(800) 492-4979 for refund. |
| 4 |
To assist American Express in identifying payments, the following
remittance information must be provided when processing payments. A sample of the
consolidated billing statement is included after these instructions. Control
Account Number: Located in the upper left corner of the consolidated
billing statement. this number must be keyed (omitting hyphens) in the CARS
"Customer Account Number" field.
Load Number: The load number is located on the Monthly Summary
of Accounts. It is the four-digit number located next to the "attention"
name. This must be placed in the CARS "invoice" field.
Statement Date: Located in the shaded box below the control
Account Number on the consolidated billing statement. This date must be keyed in the
CAR's "Invoice Date" field.
|
| 5 |
The full amount of the charge card invoice must be paid by the due date.
Disputed amounts and credits will appear on subsequent invoices. Monthly
invoices must not be reduced by unapplied credits. |
| 6 |
Payments to AMEX for purchases charged to the purchasing card that should
be paid from nom-state (local) funds may be paid from the State treasury providing that
the State treasury is reimbursed from the appropriate non-state funds within 30 days.
Documentation pertaining to these reimbursement transactions should be kept on
file. Purchases and reimbursement relating to non-state funds must be made in
accordance with CAPP Topic No. 20350, Non-State Funds. |
| 7 |
Sub-object codes 1209, 1309, 1509 and 2209 have been established within
each relevant major object code series which may only be used to record expenditures made
using the charge card. These codes may be used for permanent recordation.
Reclassification to various sub-object codes for state financial reporting purposes is not
necessary. These codes may only be used for purposes of recording expenditures
at the sub-object code level, not for budgeting purposes. |
| 8 |
Payment can be made before the statement is reconciled, but reconciliation
must occur prior to receipt of the following month's statement. |
| Management
Information Reports
American Express provides agencies detailed management information reports that enable
them to monitor cardholder usage policy compliance and frequency of vendor usage.
Management information currently available include: |
| Supplier Management |
Program Mgt/Policy Compliance |
|
|
| Industry Spending Summary Report |
Cardholder Activity Report |
| Industry Spending Trending |
Spending Analysis Detail |
| Preferred Supplier Exception Report |
Cardholder Listing |
| Minority-Owned Supplier Report |
Accounts Summary |
| Un-Incorporated Supplier Report |
| Request reports through the agency Program Administrator, preferably at
the time of card issuance. The Program Administrator forwards the report requests to
American Express. |
| 1099 Reporting
Payments made to vendors using the purchasing card may be subject to 1099 reporting.
The agency is responsible for adding 1099 reportable payments to individual vendor
payment totals for proper 1099 reporting. The Un-Incorporated Supplier Report, the
Report of Payments by Tax ID, and Industry Spending Summary are
available to assist in this process. |
| Preferred Supplier Guide
The Preferred Supplier Guide is a publication distributed by AMEX that lists
vendors who currently accept the purchasing card. The guide includes vendor
information such as city, state and zip code for each vendor location, standard industry
code and point of sale equipment. The Preferred Supplier Guide should be
used to identify a participating vendor that sells the goods or services needed. This
publication can be obtained from you agency's Program Administrator.
If you would like to purchase from a non-participating vendor, you should contact your
agency's Program Administrator to refer the vendor to the purchasing card program.
The Program Administrator will forward the referral to AMEX. |
| Internal Control
Agencies must develop and document internal control procedures to ensure that all
payments to AMEX are made by the 17th of the month. The agency procedures must:
- Ensure the purchase logs and cardholder statements are obtained and reconciled with the
corresponding AMEX statement prior to receipt of the next AMEX statement;
- Ensure the purchase logs have been reviewed and approved by the cardholder's supervisor;
- Ensure that unacceptable materials and incomplete services are documented on the
purchasing log and the purchaser took the appropriate corrective action with the vendor;
and
- Ensure that the original payment processing documents are maintained in an agency file
for audit purposes.
|
| Instructions
Specific to Virginia Military Institute
American Express Purchases Log
In order to verify the accuracy of billing statements received from AMEX, it will be
necessary to maintain an accurate log of purchases made with the department's American
Express Card.
At the start of each billing cycle, begin a new log sheet for each month by completing
the information in the box located in the upper right corner. This includes
department name, name of AMEX cardholder, the AMEX card number and the GL account to be
charged.
As each purchase is made, record the purchase on the log for the appropriate GL account
to be charge. Include the information as noted on the log to include date of
purchase, vendor name, description, object code to be charged and the amount.
On of three object codes will be used for all charge card purchases. It will not
be necessary to use specific detailed object codes on charge card purchases as are used
for normal voucher purchases. continue to use the various object codes as in the
past on normal voucher payment. The applicable object code for charge card purchases
are:
5301 - Charge card purchases of
Supplies and Materials
5601 - Charge card purchases of
Equipment
5501 - Charge card purchases of
Contractual Services
Cover Sheet for Payment to American Express
At the end of each billing cycle, each cardholder must consolidate the information
contained on the log sheet (s).
Complete the top half of the cover sheet by supplying the department name, name of AMEX
cardholder, AMEX card number, statement closing date, total amount of bill, and approving
signature (department head, etc.). The employee reconciling the bill, normally the
cardholder, must sign the certification stating that purchases were received in accordance
with state regulations.
The bottom portion of the cover sheet is used to record summary information obtained
from the log sheet (s). This will be used by the Comptroller's office to distribute
charges by GL account number and object codes. There should be no more than 3 lines
of coding for each GL account. |
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