1.0 |
PURPOSE AND CONTENT
The BART purchase card system provides a means for using credit cards for small purchases.
The regulations governing the use of the BART purchase cards are set forth in the District's Procurement Manual, Chapter V, Section [.] Micropurchase procedures and other related sections.
The system contains specific procedures for use by procurement personnel as well as a wide range of individuals who participate in the purchase card program. These procedures integrate diverse regulatory and operational information from numerous sources in a user-oriented document.
The Supervisor, Procurement Administration has been designated by the Department Manager, Procurement as the focal point for applications, issuance and destruction of cards, establishment of reports, and administrative training for this Program. |
2.0 |
INTRODUCTION
The State of California ("State") has awarded a contract for statewide commercial credit card services to Rocky Mountain BankCard System, Inc. ("contractor"). The contract was intended to provide, at the request of state ordering agencies, state-wide commercial purchase cards and associated services to state employees for the purpose of paying for purchases made for official state purposes.
In 1995, the State made these services available to any of its political subdivisions of which BART as a public utility district qualifies for participation in the program. On July 1, 1996, the District commenced its program and issued these procedures.
These procedures are designed to supplement the District's Procurement Manual and any "Instructions for the Use of the District Purchase Card" distributed to the cardholder and "Approving Official Instructions for the Use of the District Purchase Card" distributed to the approving official at the time the card is issued. In the event these procedures conflict with any instructions provided by the contractor, these procedures take precedent.
ALL PURCHASES THAT WILL BE PAID FOR USING THE CARD SHALL COMPLY WITH BART'S PROCUREMENT MANUAL AND THESE PROCEDURES UNLESS OTHERWISE APPROVED BY BART'S PROCUREMENT DEPARTMENT. |
3.0 |
DEFINITIONS
"Approving Official" means the person who reviews and approves the cardholder's monthly statement of purchases.
"Cardholder" means the District employee to whom a card is issued. The card bears this cardholder's name and may only be used by this individual to pay for authorized District purchases.
"Contractor" means the organization that will maintain all accounts as required by the State contract.
"Oral procedure" means a procedure where an order is placed or a purchase is made through an oral agreement which is made in person or by telephone by providing the card for imprint by the Merchant or the card number to the Merchant. No written purchase order or contract is issued by the District. The supplies or services are provided by the Merchant and payment is made using the District Purchase card.
"Statement of Account" is a monthly listing of all payments authorized for purchase and credits made by the cardholder and billed by the merchant. |
4.0 |
RESPONSIBILITIES |
4.1 |
As approved by the Procurement Department, the contractor will issue cards to designated cardholders and send out monthly statements to cardholders, approving officials, and the District Controller's office. The contractor will pay merchants in a timely manner and will receive reimbursement from BART. |
4.2 |
The Supervisor, Procurement Administration will serve as the liaison between the District and the contractor and subject to the direction of the Department Manager, Procurement, shall oversee the program and establish District guidelines. This individual shall establish authorization codes for controlling purchases as well as approve changes to dollar limitations or authorized merchant codes. |
4.3 |
Each cardholder is to reconcile his/her monthly statement and forward the reconciled statement to his/her approving official consistent with instruction issued by Procurement Administration. |
4.4 |
The approving official will review the cardholder's monthly statement and serve as liaison with Procurement Administration and the Controller's Office. Each approving official shall establish, after coordination with Procurement Administration, a budgetary limit for each cardholder's monthly purchases.
THE SPONSORING DEPARTMENT'S CONTINUING PARTICIPATION IN THIS PROGRAM IS PREDICATED UPON MAINTAINING EXPENDITURES WITHIN OPERATING BUDGET LIMITS.
FAILURE TO DO SO WILL CAUSE THIS MICROPURCHASE AUTHORITY TO BE REVOKED BY THE PROCUREMENT DEPARTMENT.
The approving official will certify the cardholder's monthly statements and ensure that payments are for purchases which are authorized and made in accordance with the District's Procurement Manual and these procedures.
The approving official will also assist the cardholder in resolving disputed payments.
Either the approving official or the Department Manager, Procurement has authority to direct Procurement Administration to instruct the contractor to cancel a card at any time. |
4.4.1 |
This approving authority nominally rests with the Sponsoring or Using Department Manager and may not be further redelegated other than for temporary absences without the concurrence of the Department Manager, Procurement.
Generally, this authority should be redelegated where the Division Manager function oversees 50 employees or more. Any such redelegation on a standing basis such as mentioned above, must be reviewed at least semi-annually by the supervisor as part of employees performance evaluation. Any pertinent information coming out of these reviews should be separately summarized and transmitted to the Procurement Department for their review. |
4.5 |
Procurement Administration shall establish a budgetary limit for each office that does not exceed the sum of the approving official's cardholders' monthly purchase limits. This should be reviewed quarterly and adjusted if necessary to reflect the cardholders' actual spending patterns and minimize the risk to the District of a spending overrun in the fourth quarter of the then current fiscal year.
Procurement Administration shall also coordinate, process and monitor resolution of all disputed purchases, credits or billing errors, unless the Department Manager, Procurement designates another individual or office to perform this function. |
4.6 |
District Controller's Office shall answer the contractor's questions about payment of monthly statements as well as make payments under this program. |
5.0 |
USE OF THE DISTRICT PURCHASE CARD |
5.1 |
The Purchase card may be used to pay for small purchases made in accordance with Chapter V of the District's Procurement Manual and these procedures. It may also be used to pay for orders placed against established requirements contracts or with established sources of supply, when authorized by the contract or regulation requiring use of the source. However, District inventories should be checked for availability prior to making a purchase using the card. |
5.2 |
The Purchase card can be used to pay for supplies or services acquired using oral solicitation procedures. It may also be used to pay for supplies or services that are acquired through a purchase order or an individual order under a requirements contract where the contract specifically allows such payment method. |
5.3 |
Without exception, the Purchase card may only be used to pay for authorized District purchases. |
5.4 |
Under no circumstances, will the Purchase card be used for cash advances. |
6.0 |
SETTING UP THE PURCHASE CARD ACCOUNT
The contractor will provide Procurement Administration with all the necessary application forms (cardholder, approving official, disputes, destruction notice etc.).
The Sponsoring Department will request that Procurement issue purchase card(s) to named District employee(s) and assure funding of such purchases by using the Bulk funding procedure in BART's Procurement Manual, Chapter V.
Subject to the procurement authority delegation procedures in the Procurement Manual, Chapter I, Procurement Administration will distribute the forms to selected cardholders and approving officials for completion.
The Cardholder(s) and Approving Official will complete the forms indicating they understand the terms of its use and will agree to abide by these procedures. The cards are issued for a one year period and will be subject to review by the Procurement Department each year prior to renewal. (Other organizational functions at BART, such as Internal Audit or Civil Rights, may review usage of the purchase card by the Sponsoring Department.)
Upon completion, Procurement Administration shall process and forward the forms to the contractor and then issue the cards to the sponsoring department when received.
The contractor is capable of providing various reports to meet management and administrative needs. During the account setup process, Procurement Administration will discuss the various reports available with Sponsoring Department management personnel. |
7.0 |
SIGNATURE CARDS
When the account information is submitted to Procurement Administration, a signature card must be completed by each approving official that states the approving official may approve the accuracy of the Statement of Account for payment. The signature card will be forwarded to the Controller's office by Procurement Administration after completion.
Sponsoring departments are responsible for delegating Approving Official authority as necessary to avoid statement processing delays and late payment penalties. |
8.0 |
DOLLAR LIMITS ASSOCIATED WITH THE PURCHASE CARD
Use of the purchase card by a cardholder is subject to a single purchase limit and a monthly cardholder limit. The purpose of these dollar limits is as follows
"Single Purchase Limit" is a limitation on the procurement authority ("micropurchase authority") delegated to the cardholder by the Department Manager, Procurement consistent with the requirements of the District's Procurement Manual, Chapter I. This limit cannot be exceeded unless a revised delegation of authority is issued by the Department Manager, Procurement or his or her designee, raising the limit.
(A "single purchase" using the card may include multiple items. However, no single purchases may exceed the authorized single purchase limit established for each cardholder.)
"Monthly Cardholder Limit" is a budgetary limit assigned by the approving official and may be modified if necessary by the Procurement Department. The approving official shall coordinate with Procurement Administration when determining a monthly limit and should reflect spending history as well as budgetary trends. The total dollar value of purchases when using the card for any single month may not exceed the monthly purchase limit set by the approving official subject to concurrence by the Procurement Department. |
9.0 |
AUTHORIZED USE OF THE CARD |
9.1 |
The unique Purchase card VISA card that the cardholder receives, may be used only by that cardholder. |
9.2 |
No other person is authorized to use the card and the card may only be issued to District employees. The card was specially designed showing the District logo imprinted upon it to avoid being mistaken for a personal purchase card. |
9.3 |
When issuing this card to an employee, authorization codes will be established by Procurement Administration and will be incorporated in the card. Under normal circumstances, merchants are required to obtain authorization from the contractor for purchases over $50.00. However, many merchants now use electronic authorization methods allowing them to obtain authorization for all purchases regardless of amount.
When authorization is sought for a purchase by the merchant, the contractor authorization system will electronically check each individual cardholder's single purchase and monthly limits, the monthly office limit, and the type of merchant where the cardholder is making the purchase before authorization for the transaction will be granted. |
9.4 |
Use of the card must meet the following conditions:
(1) The total of a single purchase to be paid for using the card may be comprised of multiple items and cannot exceed the authorized single purchase limit. Purchases will be denied if the authorized single purchase limit is exceeded. Payment for purchases may not be split in order to stay within the single purchase limit.
(2) All items purchased over the counter to be paid for using the card must be immediately available. No back ordering is allowed as well as deposits for special orders.
(3) All items purchased by a telephone order that will not be confirmed with a written order and be paid for using the card should generally be delivered by the merchant within the 30-day billing cycle. However, a longer period (up to 120 days for delivery) may be utilized by Sponsoring Departments. If the longer period is elected, procedures need to be established by the Sponsoring Department for proper reconciliation of the monthly bills, allowing for the carrying forward of items ordered but not received.
(4) All items purchased during one telephone transaction that will not be confirmed by a written order should generally be delivered in a single delivery. If a Sponsoring Department elects to allow partial deliveries, Sponsoring Department procedures must be implemented to ensure proper reconciliation of all such orders.
(5)The Purchase card may not be used to purchase personal property items over $1,000 in value unless purchased with the Controller's office concurrence prior to purchase; so the proper tagging can be done and the required accountability established.
(6) When purchasing items by phone or over the counter, the cardholder should inform the merchant that the purchase is subject to state and local tax. Contact the Controller's office for questions in this area.
(7) At the beginning of each District fiscal year and prior to the use of the purchase cards, the Sponsoring Department shall certify that funds as available using the bulk funding procedures in the District's Procurement Manual, Chapter V. |
10.0 |
UNAUTHORIZED USE OF THE CARD
Unless otherwise approved in writing by the Department Manager, Procurement, the card must not be used for the following:
(1) Cash advances;
(2) Rental or lease of motor vehicles;
(3) Rental or lease of land or buildings;
(4) Purchase of airline, bus, train, or other travel related tickets;
(5) Purchase of meals, drinks, lodging, or other travel or subsistence costs;
(6) Purchase of gasoline or oil for District automotive vehicles;
(7) Repair of District automotive vehicles; and
(8) Telephone calls |
11.0 |
ACQUISITION PROCEDURES FOR USE WHEN PAYING WITH THE PURCHASE CARD |
11.1 |
When making purchases that will be paid for using the Purchase card, all the applicable acquisition regulations apply. Regardless of whether the open market purchase is made using oral procedures or using a written purchase order or contract, the cardholder must:
(1) Ensure that funds are available and certified to pay for the items being purchased. A funded Purchase Request (PR) shall support each credit card purchase. The PR may be bulk funded.
(2) Be aware of the District's commitment to DBE firms and they will be held accountable for their DBE participation during the fiscal year.
(3) Solicit competition for purchases |
11.2.1 |
Users should be aware that it is common commercial practice for banks to charge merchants for their participation in purchase card programs by "discounting" their payment by 2 to as much as 15% of the total charge. A $100 bill to the customer and paid to the bank in a monthly statement may only represent $98 to $85 in actual revenue to the merchant from the bank. Merchants are aware of this and restrained only by competition, will adjust their pricing to reflect these costs; or they will offer their customers a cash discount. |
11.2.2 |
It is against District policy to pay any type of a "surcharge" to a Merchant, offsetting the bank discount. Likewise, users should not agree to a Merchant's request to revise the price above what the general public pays for an item in order to make up for the bank's discount. |
11.3.1 |
Users should also be aware that proper functioning of this program rests upon timely payments to the Contractor. Disputes should be handled through the Merchant, not the Contractor. Users must know the refund, exchange and warranty terms offered by the Merchant prior to making the purchase. Adjustment of purchases of defective materials from merchants is the responsibility of the sponsoring department and not the Procurement Department, or the Contractor. |
11.3.2 |
It is District policy to purchase goods, materials, or equipment only from those Merchants that offer the District full refund or exchange rights at the District's discretion. Such rights shall be in writing, either transmitted to the District employee, or otherwise publicly noticed. |
11.4 |
Oral solicitations should be used whenever possible within the local trade area. "Local trade area" is defined as the three county area that encompasses the District. |
11.5 |
Written solicitations are recommended to be used when (I) a large number of line items are included in a single proposed acquisition, (ii) obtaining oral quotations is not considered economical or practical, (iii) special specifications are required because items or services cannot be easily explained or (iv) Merchants are located outside the local trade area |
11.6 |
Purchases not in excess of $2,500 may be accomplished without securing competition if the cardholder (functioning as the contracting officer) considers the prices to be reasonable. |
11.6.1 |
Generally speaking, the District's pricing objective in making micropurchases, is to obtain the same price that the general public would pay for the item if they were buying such an item in similar circumstances and quantities.
If the item is not a broadly distributed commercial product, then the District's pricing objective is to achieve the same terms as that of the Merchant's most favored customer if possible. |
11.6.2 |
These purchases are to be distributed equitably among qualified Merchants by means of Merchant rotation. If practical, other than the previous Merchant should be solicited when placing repeat orders. |
11.7 |
A reasonable number of sources must be solicited (at least three) for purchases over $2,500. If practical, two of these sources shall not have been previously solicited. If merchants furnish standing price quotations or catalog prices on a recurring basis, verifying the quotations or prices for individual purchases is not necessary, but the prices should be periodically confirmed as current. When determining the number of sources to solicit, consider (I) the nature of the item or service to be purchased and whether it is highly competitive, (ii) information from recent purchases of the same or similar item or service, (iii) the urgency of the purchase, (iv) the dollar value of the purchase, and (v) past experience concerning merchants' prices. |
11.8 |
Cardholders are not required to document their purchases under $2,500 with respect to competition or reasonableness of price unless (1) The District employee has reasonable basis to suspect or has other information to indicate the price may not be reasonable or (2) it is the purchase of an item for which no comparable pricing information is available.
The monthly invoice approval package transmitted to the approving official must contain an explanation of how price reasonableness was determined in those instances. |
11.9 |
Oral Purchase Procedures
Oral procedures may be used to acquire supplies or services that can be described in sufficient detail so that the parties to the agreement have a clear understanding of what is being acquired; and a purchase order or contract is not required by either the Merchant or the District.
When placing a telephone order to be paid using the Purchase card, the cardholder will:
(1) Notify the Merchant that the purchase is subject to state and local taxes.
(2) Confirm that the Merchant is aware of all required District terms and conditions.
(3) Confirm that the Merchant agrees to charge the purchase card when shipment is made so that receipt of the supplies may be certified on the monthly Statement of Account.
(4) Instruct the Merchant to include the following information with the shipping documents or packing slip:
(i) Cardholder name and mail code;
(ii) Building number, room number, street address, city and state;
(iii) Cardholder telephone number;
(iv) The term: Purchase card;
(v) Purchase Request or Purchase Order Number.
This information will alert the receiving offices and the requisitioner that the supplies have been purchased with the purchase card.
A log should be used to document or record telephone purchase card orders of $2,500 or less when competitive quotes are not solicited. If competitive quotes are solicited for purchases of $2,500 or less, or if the purchase exceeds $2,500 and therefore requires competition (Procurement staff only), the record shall be documented.
The documentation should be held until the monthly billing statement is received and then attached to the statement when it is submitted to the approving official. |
11.10 |
Purchases Requiring the Issuance of a Written Order or Contract
If the Purchase card is used to pay for a purchase made by using one of the purchase order or contract forms, the Merchant should be provided the necessary information from the card orally, either in person or by telephone, and the statement "Payment to be made by purchase card" should be inserted on the form. Do not include specific information from the card on the purchase order. If the Merchant requires an order, an authorized Sponsoring Department form may be used. The Merchant is given its copy of the purchase order and the cardholder maintains a copy. |
12.0 |
DOCUMENTATION, RECONCILIATION AND PAYMENT PROCEDURES : |
12.1 |
Any time a purchase is made that will be paid using the card, whether it is done over the counter or by telephone, a document must be retained as proof of purchase. These documents will later be used to verify the purchases shown on the cardholder monthly statement.
(1) When a purchase is made over the counter, the cardholder is to obtain a customer copy of the charge slip, which will become the accountable document (make sure all carbons are destroyed).
(2) When making purchases by phone, the cardholder is to document the transaction on a log, annotate the PR, and attach any shipping documents associated with the order. |
12.2 |
The contractor will provide and distribute three monthly statements within five working days after the end of the 30-day billing cycle.
(1) Cardholder - will receive a statement showing all purchases, credits and other data on transactions the cardholder has made in the 30-day billing cycle.
(2) Approving official - will receive a copy of all cardholder statements for which he/she has approving authority and a summary sheet for these statements.
(3) Controller's Office - will receive a statement providing summary data by cardholder and approving official. |
12.3 |
At the end of each monthly billing cycle, the cardholder must reconcile the information on his/her statement. The cardholder must fill in the appropriate accounting classification in the accounting code block, if not the same as the Master Accounting Code, the organization or individual for whom the purchase was made, and a description, if not provided, for each purchase. The cardholder must then sign the statement, attach all supporting documentation and forward it to the approving official or designated alternate. It is important that the cardholder check each purchase on the statement to verify the accuracy. If an item has been returned and a credit voucher received, the cardholder will verify that the credit is reflected on the statement. If purchased items and credits are not on the next monthly statement, the transaction documentation will be retained by the cardholder until the purchase or credit appears on the statement. If the purchase or credit does not appear on the next monthly statement, the cardholder or approving official must notify the Administrative Office Contact to resolve and reconcile the statement. |
12.4 |
If for some reason the cardholder does not have documentation of the transaction to send with the statement, he/she must attach an explanation that includes a description of the item, date of purchase, merchant's name and why there is not supporting documentation. |
12.5 |
The cardholder must sign the monthly statement and forward it to the approving official within five working days of receipt. If the cardholder cannot review the statement at the time that it is received, the approving official is responsible for reviewing and certifying the cardholder's statement. The approving official will go over the cardholder's statement with the cardholder upon his/her return. |
12.6 |
The approving official is responsible for the following:
(1) Supplying the appropriate financial management office with the date services provided by the contractor were received and the date services were accepted. The date services were received will be the last day of the monthly billing cycle for the contractor. The date services were accepted will be the date the approving official signs the reverse side of the statement of account. If the approving official takes more than seven calendar days to accept the services, acceptance (for determining payment due date for compliance with prompt payment regulations only) will be deemed to occur seven calendar days after receipt of the services. If any purchased items have not been received or accepted by the time the statement is received, the items should be disputed using the procedures in paragraph 13, in order to prevent payment delays. It is critical that this information be supplied in order to avoid late payment penalties.
(2) Certifying and signing monthly cardholder-signed statements and summary statements;
(3) Forwarding signed cardholder statements and finance copies of receiving reports and supporting documents to the District's Controller's office for payment.
(4) Forwarding monthly summary statements, and the cardholder statements to the District Controller's office in time to be received within 15 working days of receipt by the approving official to avoid late payment penalties;
(5) Retaining copies of summary statements and fund certification, solicitation and award documentation as supporting documentation on purchases. Records retention and disposition procedures in BART's Procurement Manual, Chapter V, should be followed for documentation of purchases paid for using the purchase card. |
13.0 |
BILLING ERRORS AND DISPUTES: |
13.1 |
If a cardholder receives a statement that lists a transaction for merchandise that has not been received, the cardholder (or the approving official) must first attempt to resolve the issue with the Merchant Generally speaking, this will mean that the bill gets paid in full, including the disputed charge and the merchant credit will clear in the following billing cycle This is somewhat of a departure from the normal business practices of the District. The reason is the administrative effort required on the part of the Contractor , Procurement department and Controller's office to track disputed items. (See also 11.3.1 and 11.3.2 of this Procedure requiring Sponsoring departments to conduct business only with those merchants that offer full refunds or exchanges.)
In those instances where these procedures are not effective, Sponsoring Departments will notify Procurement Administration and complete the Cardholder Questioned item form. The contractor will credit the transaction until the dispute is resolved. In addition, a copy of the form must be attached to the cardholder's monthly statement and sent to the Controller's office. |
13.2 |
If items purchased with the card are found to be defective, the cardholder has the responsibility to obtain replacement or correction of the item as soon as possible using the same procedures in Section 13.1 above. (See also 11.3.1 and 11.3.2 of this Procedure requiring Sponsoring departments to conduct business only with those merchants that offer full refunds or exchanges.)
If the merchant refuses to replace or correct the faulty item, then the purchase of the item will be considered in dispute. Items in dispute are handled in the same manner as billing errors. |
13.3 |
If items purchased with the card don't include the appropriate amount of sales tax, the Sponsoring Department will communicate to the Controller's office with the monthly billing that the sales tax needs to be accrued for this item. |
14.0 |
CONTACT WITH THE CONTRACTOR
The contractor should be contacted only to report a LOST OR STOLEN card using the telephone numbers given below in Section 15.0. All other questions should be directed to either Procurement Administration or the Controller's office. |
15.0 |
LOST OR STOLEN CARDS |
15.1 |
If the card is lost or stolen, it is important that the cardholder immediately notify Rocky Mountain BankCard System, Inc., at the following numbers:
(1) 24 hours a day, 7 days a week (Ask for I.M.P.A.C. customer service)
(A) 1-800-227-6736
(2) Automated authorization service number for use by merchants only
(A) 1-800-525-5093 |
15.2 |
The cardholder must also notify the approving official of the lost or stolen card within one workday after discovering the card missing. The approving official must also notify BART Police at the same time they receive notice. |
15.3 |
The approving official shall submit a written report to Procurement Administration within five workdays. The report will include:
(1) the card number
(2) the cardholder's complete name
(3) the date and location of the loss
(4) the date reported to BART police
(5) date and time the contractor was notified
(6) any purchase(s) made on the day the card was lost/stolen
(7) any other pertinent information |
15.4 |
A card that is subsequently found by the cardholder after being reported lost or stolen will be cut in half and given to his/her approving official. The approving official will complete the destruction notice and forward the notice to Procurement Administration and BART Police. |
16.0 |
CARD SECURITY
It is the cardholder's responsibility to safeguard the purchase card and account number at all times. The cardholder must not allow anyone to use his/her card or account number. A violation of this trust will require that the card be withdrawn from the cardholder with the possibility of subsequent disciplinary action |
17.0 |
SEPARATION OF CARDHOLDER
Upon separation of a cardholder, the cardholder must surrender the card to his/her approving official who will complete the destruction notice and forward the notice to Procurement Administration. |
18.0 |
TRANSFER OF CARDHOLDER TO ANOTHER APPROVING OFFICIAL
If a cardholder is transferred to another Department or Division with a different approving official, the new approving official must determine if the employee will continue to be a cardholder within his/her Department or Division. If it is determined that the card should be kept by the cardholder, the master file can be changed by requesting, in writing, that Procurement Administration have the contractor add the cardholder to the new approving official's responsibility and delete him/her from the old file without issuing a new card. |
19.0 |
UNAUTHORIZED PURCHASES OR CARELESS USE OF THE PURCHASE CARD
A cardholder who makes unauthorized purchases or carelessly uses the card may be liable to BART for the total dollar amount of unauthorized purchases made in connection with the misuse or negligence. Also, the cardholder may be subjected to disciplinary action for unauthorized or careless use.
BART will be liable for the use of Purchase cards by authorized users (cardholders). |