IS-1814 Procurement Card Program

Introduction

1.1 The Procurement Card Program at Central New Mexico Community College (CNM) is a purchasing tool designed to expedite purchasing and billing by reducing the processing costs and enabling approved cardholders to make in-store and online purchases.

Program Description

2.1 The procurement card (P-Card) may be used for materials, supplies, services, and non-capital equipment not exceeding $3,000 per transaction for an individual Cardholder. The $3,000 limit may be increased or decreased with approval from the departmental budget authority and the Purchasing Department. There are no limits on the number of daily or monthly transactions unless a departmental budget authority has set such limits for an individual Cardholder. An attempt to use the procurement card for purchases in excess of the set card limits will result in the purchases being rejected by the bank and the vendor. The P-Card cannot be used for any of prohibited categories of goods and services listed in sections seventeen (17) and eighteen (18) of this procedure without prior approval from the Chief Procurement Officer.  Additionally, the P-Card cannot be used at any of the vendors that are categorized under the blocked MCC numbers shown in the Merchant Category Codes appendix of this procedure. The list of MCC numbers will be reviewed each July during even-numbered years.

2.1.1 The CNM Purchasing Department must pre-approve any single transaction in excess of $3,000.

2.1.2 The CNM Purchasing Department must pre-approve any transaction for tangible personal property including equipment in excess of $5,000 per item.

2.1.3 Purchase of computers/laptops or tablets and software, licensing, or cloud-based subscriptions regardless of the cost must be preapproved by ITS prior to using the P-Card. The completed ITS approval form must be included with the receipt to document the expense. Items that have to be tagged must be delivered to the CNM Warehouse so that items are appropriately accounted for by ITS.

Any first-time subscription or membership must get President’s Office approval and attach the approval to the purchase documentation.

2.1.4 Conference Registrations/Trainings that involve travel (in-state or out-of-state) must include the approved travel request form in addition to the receipt to document the expense.

2.1.5 Any use of the CNM logo requires preapproval by MCO prior to using the P-Card. The MCO approval form must be included with the receipt to document the expense.

2.1.6 Federal Grants expenditures using a P-Card require three quotes are provided for amounts above $10,000.

2.2 All purchases completed using the CNM Procurement Card are subject to the New Mexico Procurement Code.

2.3 Travel services are to be obtained in accordance with the CNM Travel Policy.

2.4 Procurement Card (P-Card) purchases must be made in accordance with the following procedures and required trainings, unless an exception has been granted in writing, by the Purchasing Department.

Procurement Card (P-Card) Terms

3.1 Allowed purchase: An acceptable transaction that utilizes the P-Card in accordance with this section.

3.2 Cardholder: CNM employee that has submitted an application and has been granted the right of purchasing for their department. This person is responsible for any activity on a P-Card issued in their name. A cardholder can delegate responsibilities of reconciliation to another user but remains responsible for designee actions.

3.3 Construction materials/services: materials or services used in building, altering, repairing, installing, demolishing or similar work on buildings, facilities, structures, or similar dwellings.

3.4 Control Agent: CNM employee, at appropriate level, who reviews purchases as allowable and appropriate.

3.5 Backup Control Agent: CNM employee, at appropriate level, who serves as a substitute to the primary Control Agent.

3.6 Delinquency Notice: Notice received by a cardholder or Control Agent regarding missed approval deadlines or reconciliation in the P-Card system.

3.7 Eligible P-Card holder: CNM employee approved by their department.

3.8 Equipment: Tangible personal property which operates independently of other units, costs $5,000 or more, and is included in the College's inventory.

3.9 Fraud: Any unauthorized activity or transaction performed on a P-Card.

3.10 Issuing Bank: Bank of America available 24/7/365 at 1 (888) 449-2273.

3.11 Limited services: Services that can be purchased on P-Card that do not require a formal contract and are completed within current fiscal year.

3.12 P-Card System: Bank of America Works system

3.13 Receipt Attachment: a scanned receipt imaging packet, uploaded into P-Card system that includes coversheet, cardholder statement and vendor receipts for every statement cycle with activity.

3.14 Reconciler: CNM employee who performs reconciliation of a P-Card statement, as a designee of the cardholder.

3.15 Restricted purchase: Items that can be purchased on CNM funds, but are not allowed to be purchased using a P-Card.

Card Allocations

4.1 Each department can have more than one cardholder.

4.2 If an employee moves to a new position, the card should be terminated or the new supervisor and control agent must send in a new authorization form for a new P-Card holder with the updated cost account information.

Purchasing Reconciliation System

5.1 The procurement card system works like the normal credit card in that a statement is issued to the cardholder at the end of each billing cycle.

5.2 A reconciliation process is in place that requires the cardholder to reconcile the statement with the purchase receipts. The Control Agent must approve the reconciliation.

5.3 Cardholders have seven (7) business days from the date of P-Card system notification to reconcile a statement in the P-Card system. If the statement is not processed within the allotted timeframe, the statement will be forwarded to the designated Control Agent and the cardholder will receive a delinquency notice.

5.4 Cardholders will be required to upload their receipts and other backup to the Issuing Bank’s online system.  Documents must be retained by the Cardholder until the Fiscal Year’s audit has been completed.

Cardholder Eligibility and Applications

6.1 Application for a procurement card is made by completing a Cardholder Application form.

6.2 A CNM employee, who meets the Procurement Card (P-Card) eligibility requirements may obtain a Procurement Card (P-Card) to purchase goods and limited services. Purchases utilizing the P-Card will follow policies and procedures as established and maintained by the Purchasing Department. P-Card purchases are subject to applicable CNM policies and procedures related to disbursements.

6.3 Each application must include approvals from the Control Agent, supervisor, and the Program Managers. Card applications for Contracts and Grants accounts (Funds 2XXXX) must include the grant end date, a back-up operational account, and be approved by the Contracts and Grants Office.

6.4 Applicants that are approved must attend a training session and complete a cardholder P-card agreement before a procurement card is issued.

6.5 Grant Project Directors must attend training before a procurement card will be issued for their grant.

Purchases

7.1 Each card is given an approved monthly spending limit that cannot be exceeded without pre-approval from the Purchasing Department. If a cardholder attempts to purchase an item and the monthly limit is exceeded, the purchase is declined.

7.2 All purchases for tangible goods made with the procurement card are tax exempt. If the vendor does not have a tax certificate for CNM on file, inform the vendor that CNM's New Mexico CRS number is imprinted on each card. Any tax charged to the procurement card related to tangible goods is the responsibility of the cardholder. Tax is allowed on services.

7.3 Receipts are required for all P-Card transactions and must be maintained by the department by cardholder. Cardholders shall follow CNM Imaging System Plan for Procurement Card receipt imaging.

7.4 In the event that a receipt cannot be obtained, a P- Card Missing Receipt form must be substituted for the missing receipt

7.5 If items will be shipped to Shipping and Receiving, a completed Procurement Card Order Approval and Receiving Form is sent via e-mail to the Shipping and Receiving Department at S&R@cnm.edu. Failure to send the receiving form to Shipping and Receiving, when making a procurement card purchase, may result in the order being returned to the vendor.

7.6 All P-Card receipts issued by the vendor must be included in the monthly reconciliation.

Returns

8.1 If an item purchased with the P-Card is returned to the vendor, the vendor must issue a credit to the P-Card. Under no circumstances should cash be accepted in lieu of a credit to the procurement card account. 

8.2 Cardholders are responsible for ensuring a credit is received and applied to correct account code.  

Disputes / Credits / Fraud

9.1 It is the cardholder’s responsibility to contact issuing bank immediately to report fraud or disputed transactions.

9.2 The cardholder should ensure credits received from the issuing bank are applied to the correct account code

Security and Liability

10.1 The P-Card can only be used by the assigned cardholder.

10.2 Any misuses of the P-Card result in disciplinary action in accordance with policy at CNM up to and including termination. Unapproved purchases may be withheld from an employee’s wages.

10.3 The P-Card should remain on campus when not in use and be kept in a secure location so that it is protected from theft or misuse.  The account number must remain confidential to avoid misuse.

10.4 Any incident of card misuse may result in cancellation of card privileges.

10.5 Charges made on CNM P-Cards do not affect the personal credit of the cardholder.

Lost, Misplaced, or Stolen Cards

11.1 P-Cards that are lost, misplaced, or stolen must be reported to Bank of America immediately at the 24-hour number, (888) 449-2273.

11.2 CNM’s P-Card Administrators must be notified immediately that the card is no longer in the possession of the cardholder by emailing pcard@cnm.edu in the event of a lost, misplaced, or stolen card.

11.3 A replacement card is issued from Bank of America after notification is received.

11.4 Failure to make timely notifications could result in the department being responsible for unauthorized transactions. 

Fiscal Responsibilities

12.1 If a transaction is declined as unallowable, the CNM’s Business Office will set up an accounts receivable in the cardholder’s name. The cardholder will be notified by e-mail of the unallowable transaction and balance of the amount due. It is the cardholder’s responsibility to remit payment to CNM’s Cashiers Office for the unallowable charge.

12.2 If a vendor applies tax to an unallowable purchase, the amount of the tax must be split from the remaining transactions. The cardholder is responsible for receiving a credit for the tax and ensuring it is applied to the correct index and account code.

12.3 If a purchase needs to be applied to multiple cost account codes, the transaction can be split in the P-Card system by amount or percentage during the reconciliation period.

Compliance

13.1 The issuance of a CNM Procurement Card (P-Card) is a privilege and requires adherence to policies and procedures. Any misuse of the P-card may result in immediate suspension of P-Card privileges, if so deemed by the Central Purchasing Office and/or Vice President for Finance and Operations.

13.2 Failure to utilize the P-card correctly or to adhere to the electronic approval / reconciliation schedule may result in the following action:

13.2.1 Delinquency Notice – Not reconciling or approving in a timely manner

a) First Non-Compliance - Notification sent to Supervisor and Department Head/Dean

b) Second Non-Compliance - Notification sent to Supervisor, Department Head/Dean and VP

c) Third Non-Compliance - Suspension of privileges

13.2.2 Purchase of Unallowable Item

a) First Non-Compliance - Notification sent to Supervisor and Department Head/Dean

b) Second Non-Compliance - Notification sent to Supervisor, Department Head/Dean and VP

c) Third Non-Compliance - Suspension of privileges

13.2.3 Failure to attach receipts to statement

a) First Non-Compliance - Notification sent to Supervisor and Department Head/Dean

b) Second Non-Compliance - Notification sent to Supervisor, Department Head/Dean and VP

c) Third Non-Compliance - Suspension of privileges

Departmental Audits

14.1 Random audits will be performed on P-Card-departmental records. Once an audit report is complete, the department will be provided with a copy of any audit recommendations and will be expected to reply with a management response and action plan.

Employment Status Change

15.1 If any change in employment status occurs, such as termination, transfer, change in employee FTE, supervisors must contact the P-Card Administrators at pcard@cnm.edu. P-Card Administrators may inactivate an employee’s assigned P-Card and delete the employee from the list of approved P-Card users to ensure no fraudulent use of the card after being notified of the employee’s status change. 

15.2 If a cardholder employee status is termination prior to reconciling the last statement, the Control Agent is responsible to ensure that the statement is reconciled.

Control Agent’s and Backup Control Agent’s Responsibilities

16.1 A Procurement Card (P-Card) Control Agent (approver)/Backup Control Agent has responsibilities for reviewing and approving cardholder statements in the P-Card system. In addition to the previous policies the following apply to Control Agents/Backup Control Agent.

16.2 Deadline Transactions: If a statement is forwarded to the Control Agent, for which a cardholder missed the deadline, it is the Control Agent’s/Backup Control Agent’s responsibility to enter a purpose, account code, index, and description into the P-Card system. Additionally, the Control Agent/Backup Control Agent should submit the receipt imaging packet into the P-Card system.

16.3 P-Card Transaction Processing

16.3.1 A Control Agent/Backup Control Agent has three (3) business days from the date of P-Card system notification to review and approve a statement.

16.3.2 A subordinate should not be officially assigned as the Control Agent of the transactions of their direct supervisor.

16.3.3 A Control Agent/Backup Control Agent should be an employee with sufficient knowledge of the type of business that the cardholder conducts, in order to add value to the approval process and ensure purchases are appropriate.

16.3.4 An employee may not be the final departmental approver of a P-Card transaction initiated by cardholder.

Restricted P-Card Purchases

17.1 The procurement card may not be used for the following items and services unless the Purchasing Department has given written permission (including email) in advance of the purchase. The list should not be considered all-inclusive but merely a guide for purchases that are restricted.

• Artwork
• Capital Equipment (items with a per unit cost of $5,000 or greater)
• Cell Phones including smart phones regardless of the cost
• Deposits for facilities rentals
• Food and catering (except for food purchased by Student Organizations, the Culinary Arts Department for instructional use, GAA or similar accounts, or where permitted in Contracts and Grants).
• Gasoline
• Holiday decorations
• Internal Services
• Long distance phone calls
• Maintenance contracts
• Personal care products (i.e., tissue, lotions, antibiotic gel, dish soap etc.) needs preapproval for student use (i.e., advisement, financial aid etc.)
• Public relations items
• Building Rent/Rentals
• Student events (unless purchased by Student Organizations)
• Tables for events (such as job fairs) where information regarding CNM is handed out.
• Tangible personal property (equipment) equal to or greater than $5,000 without prior approval
• Tickets for athletic or entertainment events
• Travel-related expenses (i.e., car rental, gas, meals, train fare, bus fare, internet connections) unless obtained in accordance with the CNM Travel Policy.
• Vehicle repairs

Prohibited P-Card Purchases

18.1 Some purchases may be allowed against a CNM fund but are not allowed to be purchased using a CNM Procurement Card (P-Card). P-Cards allow expenditure of funds prior to review and, are therefore, not appropriately used for all transactions. These purchases, if made with a P-Card, may require refund from the vendor or reimbursement by the card holder and tracked as a misuse or decline violation.

18.2 Splitting of purchases or any other form of incremental purchasing is prohibited with the procurement card including purchases from the same vendor, within a relatively short period of time, using two or more charge transactions to avoid exceeding the $3,000 limit (artificially divided to qualify as small purchase). Artificially divided purchases/incremental purchasing with the card will result in cancellation of Cardholder privileges.

18.3 Blanket Orders. A Blanket Order is an open/standing purchase order issued for the purpose of goods or services on an as needed basis, usually established for a one-year period or other set period of time.

18.4 Lengthy back ordered items (i.e., long enough to require multiple payments).  Partial payments are not authorized.

18.5 Items/services to be purchased using the General Activity Account (GAA). A separate P-Card may be issued for GAA allowed purchases only.

18.6 Unallowable expenditures as listed in the Governing Board Policy Handbook, Employee Handbook, or otherwise specifically prohibited by the administration.

18.7 The card cannot be used for personal and/or unauthorized items or services.  It may only be used for items purchases for CNM business purposes.

18.8 The following are examples of unallowable purchases on a P-Card. The list should not be considered all-inclusive but merely a guide for purchases that are not allowed.

• Animals
• Annual Fees on credit cards, Interest, or Finance Charges
• Cash, cash advances or traveler's checks
• Compensation for employee personal service / Honorariums
• Donations
• Fines, Late Fees, or Penalties
• Fund Raising Costs
• Gross receipts taxes on goods
• Items for personal gain or use
• Lobbying
• Meals including business meals and luncheons
• Multi-year service agreements or formal contracts
• Occasion cards, flowers, and gifts (condolence, birthdays, going away parties) for personal or business occasion/events
• Performers
• Physical Plant Construction Projects
• Prescription Drugs/Controlled Substances
• Professional services/consultants for which there must be a contract signed or services from an attorney
• Reimbursement for loss or damage to personal items
• Tuition

Forms

• Procurement Card Cardholder Application
• Procurement Card Cardholder Agreement
• Transaction Log
• Modification of Cardholder Information
• Statement of Disputed Item
• Order Approval and Receiving Form
• Missing Receipt Form

Support Materials

• IS-1808, Purchase Requisition
• Frequently Asked Questions
• Merchant Category Code List

Reference Materials

• Purchasing Department Website