Purchase Card Procedure

Purpose

The purpose of this procedure is to define the rules and procedures governing the use of Purchase Cards.

Organisational scope

This procedure applies to the University and its subsidiaries.

Definitions

Pcard

A University issued purchase card (i.e. credit card)

GST

Goods and Services Tax

UOC

University of Otago, Christchurch campus

UOW

University of Otago, Wellington campus

HOD

Head of Department

Pcard Administrator

This role is based in the Accounts Payable Office, Financial Services Division

Content

1. Issue of Purchase Cards

1. Purchase Cards are available to staff who have a genuine need for one. To be eligible for a Purchase Card, an employee must be a University of Otago staff member and meet at least one of the following criteria:
   • Travel frequently in the course of their duties
   • Travel overseas in the course of their duties
   • Purchase single, non-recurring purchases from a supplier not already within Unimarket
   • Incur regular expenses of a kind appropriately paid for by a Purchase Card
   • Purchase small value or infrequently purchased item
2. A Purchase Card should not be used where the University has established specific procurement arrangements for certain goods and services with preferred or mandatory suppliers that do not anticipate the use of Purchase Cards. Examples of this include the purchase of stationery via UniMarket and the purchase of air travel which should be made via the University's mandatory travel agents, and the subscription to mobile phone accounts which should be made through the University’s agreement with One NZ .
3. Prospective applicants, their immediate supervisor and delegated administrators completing Purchase Card coding on behalf of a cardholder are required to have read/completed all relevant trainings prior to a Purchase Card being issued. Required reading and training include:
   • Sensitive Expenditure Video
   • User Guide for coders and cardholders (PDF)
   • Declaration of Expense – Lost Receipt Form (PDF)
4. After successful completion of the required reading and training, the Purchase Card Application Form must be completed, signed by the applicant, their Manager or Head of Department ( HOD ), and the Pcard Administrator.
5. Note that in signing an application for the issue of a Purchase Card, the HOD is deemed to have given financial delegation/authority for expenditure approval to the cardholder and the applicant's supervisor agrees to review and sign all Purchase Card statements on a monthly basis.

2. Distribution of Purchase Cards

1. The issuing bank will forward the Purchase Card directly to the Accounts Payable team. The Pcard Administrator will contact the applicant who will be required to collect the card in person (photo ID is required).
2. The applicant will also receive an email with all relevant links to the Policy and Procedures, including the Purchase Card User Guide. If the applicant is located outside of Dunedin, the purchase card will be couriered.
3. The Purchase Card can be used from the commencement date printed on the face of the card. The cardholder must visit an ANZ bank branch to add a PIN (4 digit number) to the Purchase Card, photo identification will be required. The PIN selected should be unique to this Purchase Card i.e. should not be the same number as other cards and  should be kept confidential to the cardholder. PIN numbers should never be disclosed to anyone or written down.

3. Purchase Card limits

1. Each Purchase Card will be issued with a monthly credit limit of either $2,500, $5,000 or $10,000. If a different limit under $10,000 is required, this will be approved by the Pcard Administrator on a case-by-case basis.
2. If a credit limit higher than $10,000 is required, approval resides with the Chief Financial Officer. All requests should clearly state the reasons for the higher limit.
3. Credit limits will be reviewed on a regular basis, and where a Purchase Card is being operated well below the assigned limit, that limit may be reduced at the discretion of the Purchase Card Administrator with agreement by the cardholder's HOD or Manager.
4. Temporary limit increases may be applied for as and when required by emailing the Pcard Administrator with authoriser's approval, the value of increase and the length of time required.

4. Use of the Purchase Card

1. The Purchase Card can be used at any location displaying the Visa brand.
2. The Purchase Card must only be used by the individual staff member to whom it is issued. Under no circumstances should the details of a Purchase Card be shared with another person or the Purchase Card be used by another person on the holder's behalf as per Visa policy.
3. Purchase Cards should not be used as departmental cards by several members of staff.
4. Expenditure charged to Purchase Cards must be business-related. It must be reasonable, appropriate and in accordance with the University's policies and procedures related to expenditure. In particular, cardholders should be familiar with the Travel and Travel Related Costs Policy.
5. Where expenditure is incurred on behalf of a number of cardholders, and one of the cardholders is the supervisor of the other cardholders, then the expenditure must be charged to the Purchase Card of the supervisor (the ‘one-up’ principle).
6. A Purchase Card may be used to make purchases over the phone or internet. To reflect good security practices, such purchases should only be from established reputable companies known to the University. Purchase Card details should only be entered on an identified secure web site.
   
   Note: Staff should be cautious and refrain, where possible, from purchasing from global online retailers for equipment and goods on the basis that there is very little support available when there is an issue with either the purchase or when the product is in use (non-delivery, incorrect item, warranty issue, product quality, etc).
7. Goods purchased online or by phone using a PCard should always be delivered to a University address unless prior approval from a HOD has been obtained. Approval (e.g. email) should be attached to the transaction in Finance One along with the appropriate invoice/receipt.
8. A Purchase Card should not be used where the University has established specific procurement arrangements for certain goods and services with preferred or mandatory suppliers that do not anticipate the use of Purchase Cards. Examples of this include the purchase of stationery via UniMarket and the purchase of air travel which should be made via the University's mandatory travel agents, and the subscription to mobile phone accounts which should be made through the University’s agreement with One NZ .
9. When travelling to China staff will need to link their Pcard to a Mobile Payment platform App. Please contact the Pcard Administrator who will provide you with the most current App to use. On return to New Zealand, the Pcard must be un-linked from the App.

5. Disputed transactions

1. Disputed transactions must be resolved with either the supplier or the issuing bank by the cardholder. If the issuing bank suspects a fraudulent transaction, they will contact the cardholder via text or email/phone the Pcard administrator to investigate with the cardholder.
2. If the cardholder is unable to contact the supplier, they must complete the ANZ Disputes Form and contact the Pcard Administrator so that the bank can be advised immediately that the transaction is being disputed.
   • ANZ Disputes Form (PDF)
3. The transaction must be coded as “in dispute” in the Finance One PCard module, and remain so until the issue has been resolved.

6. Cash advances

1. Purchase Cards will only be issued with a cash advance facility if the cardholder has indicated the intention to travel overseas, although such a facility may be provided to other cardholders on request to the Pcard Administrator. Each request should contain a full explanation of the reason for needing to access cash advances.
2. Where a cash advance facility is provided, the use of the facility must comply with the following:

• Drawing cash within New Zealand is not permitted unless the cardholder is away from their home campus at the time the cash is required.
• Approved koha for UOW or UOC may be withdrawn using Pcard, with approval from the Office of Māori Development provided as supporting documentation for the transaction.
• Approved Pacific Gifting for UOW or UOC may be withdrawn using Pcard, with approval from Divisional Pacific Leaders and/or the Pacific Development Office provided as supporting documentation for the transaction.
• Prior to withdrawing cash, the cardholder should exhaust all other options of payment including using the standard Purchase Card functionality.
• Cash withdrawn must be accounted for in the same manner as all other expenditure, including the attachment of appropriate supporting documentation.
• Unspent cash should be converted back to NZ currency, banked into the University bank account, and coded to the Finance One ledger account used for the original cash withdrawal. Evidence of this deposit should be included with the Purchase Card monthly statement.
• In the event that unspent cash cannot be converted back to NZ currency, such as coins or an uneconomic amount, then the cash should be returned to the Cashiers team, Financial Services Division.

7. Expenditure documentation

1. Consistent with any purchase on behalf of the University, expenditure must be supported by appropriate documentation. Tax invoices must be supplied for NZ expenditure in excess of $50.00. Appropriate invoices and/or receipts must be supplied for all foreign purchases. Invoices and/or receipts must be legible and itemised.
2. A lost receipt form must be completed for all missing receipts over $50 detailing each item of expenditure.
3. The requirements of a valid tax invoice issued by a New Zealand organisation can be found under the heading “University Expenditure – Claiming GST From Invoices Received” within the University of Otago Taxation Guidance.

8. Coding of Purchase Card Transactions

1. Purchase Card transactions will be loaded into the Finance One Pcard Module on a regular basis using an import file provided by the bank.
2. The principal coder for that card will receive a reminder email alerting them to the fact that there are outstanding transactions to be coded.
3. It is the cardholder’s or designated administrator’s responsibility to monitor and appropriately code all Purchase Card transactions. Coding needs to be completed by noon on the first working day of each month following the transaction date. If the purchase card holder is traveling for longer than 30 days at a time, an exception may be granted to allow additional time to complete this task. If an exception is given, the cardholder will receive an email from the Pcard Administrator confirming the revised due date.
4. Coding of Purchase Card transactions is actioned within the Finance One OU My PCard Module. The process includes identifying any applicable New Zealand GST, inclusion of suitable comments supporting each transaction and a summarised narration for finance reports.
   Note that both the supporting comments and ledger narrations will appear on the monthly Purchase Card statement. It is important that they include sufficient detail to substantiate each transaction.
5. Further information relating to this process can be found in the Purchase Card User Guide.

9. Monthly Purchase Card statements

1. On the first business day of each month, cardholders will be emailed a statement showing the previous month’s Purchase Card transactions. This statement should be reviewed and signed by the cardholder, declaring that “the information contained on this form is correct and the expenses incurred were for business purposes in accordance with the University of Otago Purchase Card Policy”. Under no circumstances should a Purchase Card statement be signed on behalf of the cardholder – only the cardholder can make the above declaration.
2. The Purchase Card Statement must be authorised by the cardholder’s supervisor. The supervisor must record their name and position on the statement. In all cases, this review and authorisation should be performed by a person senior to the cardholder. This is known as the “One-up” principle and should always be applied.
3. If a Purchase Card Statement contains expenditure relating to the supervisor, then it should be referred to a higher authority for approval.
4. The signed and approved Purchase Card Statement, along with all original supporting documentation must be forwarded to pcard.admin@otago.ac.nz by the date specified on the statement. If possible, each invoice/receipt should be scanned and attached to the appropriate transaction row within Finance One.

10. Lost or stolen cards

1. Purchase Cards are valuable and should be treated in the same way as a passport or cash.
2. If a Purchase Card is lost or stolen during working hours, the cardholder must contact ANZ and the Pcard Administrator immediately. The administrator will arrange for the Purchase Card to be cancelled and a replacement issued.  If the Purchase Card is lost of stolen outside normal working hours, the cardholder must contact ANZ bank immediately to arrange for the card to be cancelled and then contact the Pcard Administrator to advise the loss and initiate arrangements for a replacement card.
   
   ANZ Bank Contact details are:
   In New Zealand call 0800 888 111
   From overseas call collect +64 9 914 8026
   
   The ANZ bank is liable for all charges incurred on the account once they have been advised of the lost card.
3. In the event the lost Purchase Card is subsequently found by the cardholder, it should be destroyed as it will no longer be valid as a replacement card has been issued.

11. Audit

1. An audit of Purchase Card transactions will be performed on a regular basis by the Office of Risk, Assurance and Compliance and may be sample selected annually by external auditors as part of the annual accounts audit process.
2. If a cardholder is suspected of misusing their Purchase Card, the details will be reported to the cardholder’s HOD, the Chief Financial Officer, and the Financial Controller for comment and/or resolution.

12. Misuse of Purchase Card

1. Misuse of a Purchase Card could include, but is not limited to:
   • Inappropriate expenditure
   • Personal expenditure
   • Inappropriate or inadequate supporting documentation
   • Inappropriate use of a cash advance facility
   • Use of a Purchase Card by someone other than the cardholder
   • Failure to provide a correctly authorised monthly statement
   • Failure to comply with any other University policy or procedure related to the use of Purchase Cards
2. Misuse of the Purchase Card by the cardholder will lead to:
   • Cancellation of the Purchase Card
   • A request for immediate reimbursement of the inappropriate expenditure if repayment has not been made per Clause 5 of the Purchase Card Policy
   • Possible disciplinary action
3. Intentional misuse of a Purchase Card for personal gain is fraudulent behaviour under the University's Fraud Policy and will be referred to the relevant authorities for the purposes of investigation and possible prosecution.

13. Cessation of employment

1. If a cardholder leaves the employment of the University (or its subsidiaries), or no longer holds a role where a Purchase Card is required, it is their responsibility to:
   • Reconcile all Purchase Card expenditure since the last statement and provide the necessary supporting documentation for this expenditure.
   • Advise the Pcard Administrator so the Purchase Card can be cancelled. In the event a cardholder is not able to do so, the responsibility lies with their supervisor.
   • Return the Purchase Card to their immediate supervisor or the Pcard Administrator.

14. Review of continued use

1. A monthly review of the Purchase Cards on issue will be performed by Accounts Payable personnel. The results of the review, together with recommendations, will be presented to the Chief Financial Officer.
2. Purchase Cards which have not been used for a period of six months will be subject to cancelation.
3. If the signed and approved Purchase Card Statement and supporting documentation are not received within the policy timelines, the Purchase Card may be suspended.
4. In all cases the cardholder must account for all outstanding expenditure incurred prior to the Purchase Card being cancelled.

Related policies, procedures and forms

• Purchase Card Policy
• Financial Delegations Policy
• Travel and Related Costs Policy
• Fraud Policy
• Purchase Card Application (PDF)
• Sensitive Expenditure
• Koha Payments Policy and Procedure
• Pacific Gifting Policy, Procedure and Guidelines

Contact for further information

For further information, contact:

Accounts Payable team
Tel +64 3 479 8730
Email pcard.admin@otago.ac.nz
Web Pcard Blog