Purchasing Card Purchasing Card Reviewer TrainingReviewer Training

We will cover:We will cover:

Cardholder ResponsibilitiesCardholder Responsibilities RestrictionsRestrictions Purchases Requiring ApprovalPurchases Requiring Approval Changes to Cardholder Changes to Cardholder InformationInformation Reviewer’s ResponsibilitiesReviewer’s Responsibilities Establishing the Review ProcessEstablishing the Review Process Leaving the DepartmentLeaving the Department Location of FormsLocation of Forms Purchasing Card FraudPurchasing Card Fraud Contact InformationContact Information

Cardholder’s Cardholder’s ResponsibilitiesResponsibilities

Cardholder’s Cardholder’s ResponsibilitiesResponsibilities

Making only authorized purchases Making only authorized purchases Obtaining a detailed receipt for each Obtaining a detailed receipt for each

purchasepurchase Completing the transaction log Completing the transaction log with a with a

brief description justifying the brief description justifying the purchase purchase

Reconciling the monthly Visa Reconciling the monthly Visa statement statement

Resolving any discrepanciesResolving any discrepancies

Cardholder’s Cardholder’s Responsibilities (con’t)Responsibilities (con’t)

Ensuring credits are receivedEnsuring credits are received Documenting furniture and food Documenting furniture and food

purchases as requiredpurchases as required Signing the logSigning the log Passing the paperwork to assigned Passing the paperwork to assigned

Reviewer for approval in a timely mannerReviewer for approval in a timely manner Note: Reallocation of charges may be Note: Reallocation of charges may be

the responsibility of the cardholder, but the responsibility of the cardholder, but this decision is made at the department this decision is made at the department level.level.

Reconcile Monthly VISA Reconcile Monthly VISA StatementStatement

Compare VISA statement to Compare VISA statement to transaction log and resolve any transaction log and resolve any discrepancies in a timely mannerdiscrepancies in a timely manner

Keep all receipts and related Keep all receipts and related paperwork (VISA statement, signed paperwork (VISA statement, signed transaction log) togethertransaction log) together

Forward entire package to reviewer Forward entire package to reviewer within 3 days of completionwithin 3 days of completion

RestrictionsRestrictions

Restrictions at Point of SaleRestrictions at Point of SaleThese transactions will be declined by These transactions will be declined by

the bank:the bank: Purchases exceeding the single Purchases exceeding the single

purchase limit or monthly credit limitpurchase limit or monthly credit limit Cash advancesCash advances Restrictions by merchant categoryRestrictions by merchant category Travel (Hotels, Airfare, Car Rentals)Travel (Hotels, Airfare, Car Rentals) Restaurants, liquor storesRestaurants, liquor stores Entertainment, recreational servicesEntertainment, recreational services Personal services such as Personal services such as

photographic studios, funeral servicesphotographic studios, funeral services

State and University State and University RestrictionsRestrictions

These transactions may not automatically These transactions may not automatically decline, but are not allowed. They will be decline, but are not allowed. They will be monitored for compliance through the monitored for compliance through the review policyreview policy

Personal purchasesPersonal purchases Cash Equivalents (ex. Gift Cards)Cash Equivalents (ex. Gift Cards) Gifts, contributions, and donations (such as Gifts, contributions, and donations (such as

alcohol and flowers)alcohol and flowers) Alcohol for any purposeAlcohol for any purpose Allowing someone else to use the cardAllowing someone else to use the card

State and University State and University Restrictions (con’t)Restrictions (con’t)

Personally accepting kickbacks or Personally accepting kickbacks or incentivesincentives

Entertainment (costs of social Entertainment (costs of social activities and related incidental costs activities and related incidental costs such as meals, beverages, lodging, such as meals, beverages, lodging, transportation, and gratuities)transportation, and gratuities)

Stringing purchases to avoid limit of Stringing purchases to avoid limit of delegated authority ($5,000)delegated authority ($5,000)

State and University State and University Restrictions (con’t)Restrictions (con’t)

ServicesServices provided by an unincorporated provided by an unincorporated vendor (applies to services only – these vendor (applies to services only – these vendors must be incorporated)vendors must be incorporated)

Food purchases must be well documented Food purchases must be well documented with the name and purpose of the function with the name and purpose of the function and who attended it, by name or and who attended it, by name or affiliation. Costs for alcoholic beverages affiliation. Costs for alcoholic beverages are not to be included under any are not to be included under any circumstance.circumstance.

Purchases Requiring Purchases Requiring Additional ApprovalAdditional Approval

Licenses, contracts, and agreements must Licenses, contracts, and agreements must be sent to Procurement & Supply for be sent to Procurement & Supply for approval. Cardholders are not authorized approval. Cardholders are not authorized signatories for the Universitysignatories for the University

Telecommunications equipment (antenna, Telecommunications equipment (antenna, satellite installations, 2-way radios) satellite installations, 2-way radios) require approval from OIT/NTSrequire approval from OIT/NTS

Purchase of hazardous materials must be Purchase of hazardous materials must be generated through Environmental Safetygenerated through Environmental Safety

Modifications to building structure must be Modifications to building structure must be approved by and coordinated through approved by and coordinated through Facilities ManagementFacilities Management

Purchases Requiring Purchases Requiring Additional Approval (con’t)Additional Approval (con’t)

Purchase of furniture (must be purchased Purchase of furniture (must be purchased from MCE, or must be documented on from MCE, or must be documented on Potential Business for MCE form)Potential Business for MCE form)

All Contract and Grant funds shall be in All Contract and Grant funds shall be in compliance with the associated terms of compliance with the associated terms of the contract or grantthe contract or grant

Food purchases must be well documented Food purchases must be well documented with the name and purpose of the function with the name and purpose of the function and who attended it, by name or and who attended it, by name or affiliation.affiliation.

Changes to Cardholder Changes to Cardholder Information Information

Request changes using Account Request changes using Account Maintenance Request Form (available Maintenance Request Form (available online)online)

Cardholder Name or Address ChangeCardholder Name or Address Change Default FRS Account ChangeDefault FRS Account Change Cancel CardCancel Card Single Purchase or Monthly Credit Limit Single Purchase or Monthly Credit Limit

Change (as a minimum, requires Change (as a minimum, requires department head approval)department head approval)

No Transactions in a Billing No Transactions in a Billing Period?Period?

Logs do not have to be approvedLogs do not have to be approved Credit card statements will not be Credit card statements will not be

sent sent Review process is not required Review process is not required

Reviewer’s Reviewer’s ResponsibilitiesResponsibilities

Reviewer’s Reviewer’s ResponsibilitiesResponsibilities

Reviewer is the cardholder’s immediate Reviewer is the cardholder’s immediate supervisor or someone within the supervisor or someone within the cardholder’s chain of commandcardholder’s chain of command

Reviewers are required to ensure that Reviewers are required to ensure that charges are valid, authorized, are within charges are valid, authorized, are within UM Purchasing Card policy and procedures, UM Purchasing Card policy and procedures, and are appropriately documented and are appropriately documented

A Reviewer may not review his/her A Reviewer may not review his/her own transactionsown transactions

Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)

At the end of each billing period, the At the end of each billing period, the Reviewer is required to:Reviewer is required to: Review the transaction log to ensure all Review the transaction log to ensure all

entries are authorizedentries are authorized Ensure detailed receipt matches the Ensure detailed receipt matches the

transaction and description of purchasetransaction and description of purchase Confirm each transaction is authorized and in Confirm each transaction is authorized and in

compliance with UM policies and procedures compliance with UM policies and procedures Confirm that no one other than the Confirm that no one other than the

cardholder gained access to the card cardholder gained access to the card informationinformation

Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)

Sign the monthly transaction log for all Sign the monthly transaction log for all cardholders for whom they review, cardholders for whom they review, certifying all transactions are authorized certifying all transactions are authorized and that policy and procedures have been and that policy and procedures have been followedfollowed

Electronically sign off verifying the review Electronically sign off verifying the review has been completed (procedures located has been completed (procedures located at http://www.purchase.umd.edu/general/ at http://www.purchase.umd.edu/general/ pcardresponsibilites.html)pcardresponsibilites.html)

Reviewer’s Responsibilities Reviewer’s Responsibilities (con’t)(con’t)

Retain the records in chronological order Retain the records in chronological order in the department’s business office, and in the department’s business office, and securely maintain the files.securely maintain the files.

Ensure Contract and Grant funds are Ensure Contract and Grant funds are spent within the contract or grant spent within the contract or grant guidelines.guidelines.

Note: Reviewers will receive an email Note: Reviewers will receive an email notification each month reminding them notification each month reminding them that the review is due.that the review is due.

Ensure cards are cancelled when a Ensure cards are cancelled when a cardholder leaves the University or cardholder leaves the University or the departmentthe department

Establishing the Establishing the Review ProcessReview Process

Establishing the Review Establishing the Review ProcessProcess

Departments may require pre-Departments may require pre-authorization prior to cardholder authorization prior to cardholder making a purchase making a purchase

Some departments have established Some departments have established procedures (check with your procedures (check with your Business Office)Business Office)

Establishing the Review Establishing the Review Process (con’t)Process (con’t)

You may have an administrative person You may have an administrative person perform initial review of records:perform initial review of records: Ensure a detailed receipt is in the file, and Ensure a detailed receipt is in the file, and

that the receipt matches the description that the receipt matches the description on the logon the log

Reconcile credit card statement to the Reconcile credit card statement to the transaction logtransaction log

Place receipts in same order as listed on Place receipts in same order as listed on the log and statementthe log and statement

Establishing the Review Establishing the Review Process (con’t)Process (con’t)

Ask Questions – have a clear Ask Questions – have a clear understanding of why the purchase understanding of why the purchase was made and who authorized it.was made and who authorized it.

Only the Reviewer (supervisor) can:Only the Reviewer (supervisor) can: Certify that transactions are authorized Certify that transactions are authorized

(have you reviewed the receipt?)(have you reviewed the receipt?) Sign the actual transaction logSign the actual transaction log

Leaving the Leaving the Department?Department?

Leaving the Department?Leaving the Department?

If the If the cardholder cardholder leaves the leaves the department department Cardholder or Reviewer Notifies the Cardholder or Reviewer Notifies the

Delegated Procurement Team by Delegated Procurement Team by submitting an Account Maintenance Formsubmitting an Account Maintenance Form

Reviewer shreds the card and discards itReviewer shreds the card and discards it Reviewer performs complete assessment Reviewer performs complete assessment

of all transactions of all transactions

Leaving the Department? Leaving the Department? (con’t)(con’t)

Reviewer to conduct an exit review of Reviewer to conduct an exit review of departing cardholder’s transactionsdeparting cardholder’s transactions

Ensure sensitive equipment Ensure sensitive equipment (computers, digital cameras, etc.) are (computers, digital cameras, etc.) are tagged in inventorytagged in inventory

Take another look at all recordsTake another look at all records Trust everyone – review anywayTrust everyone – review anyway

Leaving the Department? Leaving the Department? (con’t) (con’t)

If the If the ReviewerReviewer leaves the department leaves the department Another reviewer must be assigned to each Another reviewer must be assigned to each

cardholdercardholder Complete a Reviewer Access Request form Complete a Reviewer Access Request form

Removing the previous reviewer Removing the previous reviewer Assigning a new reviewer Assigning a new reviewer

Submit form to Delegated Procurement Submit form to Delegated Procurement TeamTeam

FormsForms

All forms associated with the All forms associated with the Purchasing Card are available online Purchasing Card are available online at at

www.purchase.umd.edu www.purchase.umd.edu

Purchasing Card FraudPurchasing Card Fraud

What isWhat is Fraud?Fraud?

A deception deliberately practiced A deception deliberately practiced in order to secure unfair or in order to secure unfair or unlawful personal gainunlawful personal gain

What Fraud is NotWhat Fraud is NotMisuse Misuse

NegligenceNegligence

Misuse Misuse Restricted purchases made for the Restricted purchases made for the

institution - institution - not for personal gainnot for personal gain Examples of misuse include:Examples of misuse include:

Purchasing restricted goods and services (ie. Purchasing restricted goods and services (ie. Travel on a travel restricted card)Travel on a travel restricted card)

Intentionally splitting a purchase to circumvent Intentionally splitting a purchase to circumvent delegated authority (either by the initiative of delegated authority (either by the initiative of cardholder or departmental authority)cardholder or departmental authority)

Paying unfair and unreasonable prices, not Paying unfair and unreasonable prices, not making good business decisionsmaking good business decisions

Allowing someone else to use the cardAllowing someone else to use the card

NegligenceNegligence

Sloppy recordkeeping - Sloppy recordkeeping - not for not for personal gainpersonal gain

Unsecured record retentionUnsecured record retention Lack of one receiptLack of one receipt Missing statementsMissing statements Lack of additionally required Lack of additionally required

documentation documentation

Consequences of Misuse Consequences of Misuse and Negligenceand Negligence

Report misuse and negligence to Report misuse and negligence to Delegated Procurement Team Delegated Procurement Team

Institute the “3 strikes, you’re out” ruleInstitute the “3 strikes, you’re out” rule Suspend card until cardholder attends Suspend card until cardholder attends

another training (becomes HR issue)another training (becomes HR issue) Cancel the card (coordinate with Cancel the card (coordinate with

Delegated Procurement Team)Delegated Procurement Team)

Back to FraudBack to Fraud

Why does fraud occur?Why does fraud occur?

How does fraud occur?How does fraud occur?

Why Does Fraud Occur?Why Does Fraud Occur? Inattentive Reviewers - cardholders Inattentive Reviewers - cardholders

won’t take the risk if they know their won’t take the risk if they know their transactions are carefully reviewedtransactions are carefully reviewed

Fraud is a premeditated, calculated act to Fraud is a premeditated, calculated act to defraud institutiondefraud institution

Crime of necessity (personal financial need)Crime of necessity (personal financial need) Crime of passion (desperation)Crime of passion (desperation) Incident of bad judgmentIncident of bad judgment Program WeaknessesProgram Weaknesses

Program WeaknessesProgram Weaknesses

Department unnecessarily has too many Department unnecessarily has too many cardholderscardholders

Reviewers responsible for too many Reviewers responsible for too many cardholderscardholders

Insufficient trainingInsufficient training Faltering Reviewer (very dangerous Faltering Reviewer (very dangerous

as this is the first line of defense)as this is the first line of defense) We must have proper mechanisms We must have proper mechanisms

installed to detect and halt fraudinstalled to detect and halt fraud

How Does Fraud Occur?How Does Fraud Occur?

Services paid for, but not received by Services paid for, but not received by the University (usually involves two the University (usually involves two individuals)individuals)

Personal purchases made, and Personal purchases made, and removed from institution’s property removed from institution’s property or shipped to another locationor shipped to another location

Personal purchases made in Personal purchases made in combination with authorized combination with authorized goods/servicesgoods/services

Consequences of FraudConsequences of Fraud

RestitutionRestitution Loss of Leave TimeLoss of Leave Time Suspension and/or Termination of Suspension and/or Termination of

EmploymentEmployment FinesFines Criminal ProsecutionCriminal Prosecution

Review, Review, ReviewReview, Review, Review

Reviewers are the University’s first line of Reviewers are the University’s first line of defense against purchasing card fraud.defense against purchasing card fraud.

Purchasing card fraud is often a symptom Purchasing card fraud is often a symptom of a bigger personnel issue.of a bigger personnel issue.

If you suspect purchasing card fraud, If you suspect purchasing card fraud, contact the Delegated Procurement contact the Delegated Procurement

Team Immediately.Team Immediately.

Contact InformationContact Information

*Send an email to *Send an email to pcard@umd.edu to to certify completion of reviewer training*certify completion of reviewer training*

Contact the Delegated Procurement Contact the Delegated Procurement TeamTeam

Voice MailVoice Mail (301) 405-5834(301) 405-5834FAX FAX (301) 314-1352(301) 314-1352EmailEmail pcard@umd.edu