Purchasing Card Policy
Purchasing Card Policy
Purchasing Card Policy
This policy covers Purchasing cards, corporate cards, virtual, embedded/lodged and fuel cards.
Policy
1.1 Purchasing via a purchasing card is an approved exception to the standard purchase ordering route in order to meet business need and achieve value for money.
1.2 Individuals must adhere to this policy and understand their responsibilities under it. This policy aims to help staff comply with the terms and conditions of their purchasing card and the requirements of this policy.
1.4 The University’s purchasing card is a charge card. The balance on the card is paid by the University in full each month by direct debit. Similar to a debit card, the purchasing card is used to buy goods and services without the need to raise a Purchase Order.
1.5 The University’s card provider is HSBC (Card Provider). Policies
1.6 There are three types of card use methods: physical, embedded (sometimes called a lodged card) and virtual (see Appendix 1).
- Physical cards are cards issued to an individual within a department.
- Embedded (Lodge) cards are embedded into a supplier’s system (e.g. a travel management company for booking travel without having to provide card details for each booking).
- Virtual cards are a randomly-generated card number associated with a physical payment card which can be used once or multiple times.
1.7 Payment for goods & services by purchasing cards must be compliant with this policy and the University’s Finance Regulations.
1.8 This policy applies to all employees of the University and its subsidiary companies.
Any card misuse will be subject to the University disciplinary procedures as set out in the University Code of Conduct. The Chief Finance Officer may remove cards from users in cases of suspected or actual misuse or persistent non-compliance with this Policy.
2.1 The following are required conditions of use:
- Cardholders will be required to sign an Application and Declaration of Agreement for the card and each time their card is renewed.
- To ensure segregation of duties cardholders cannot be authorisers of their purchases. Approvals are undertaken by Budget Holders within the Finance System.
- Cardholders must operate within their set card limits. Limits are set by the Finance Services.
- Cardholders must comply with requirements relating to lost or stolen cards.
2.2 Card use will be subject to regular monitoring by Finance Services, who reserve the right to cancel and withdraw cards from individuals.
2.3 If a member of staff no longer have a business need to hold a card, or if they leave the University, either for long-term absence or permanently, they must return the card to Finance Services.
3.1 Cards should only be used for purchases of non-restricted commodities from a supplier that accepts VISA/MASTERCARD as a form of payment under the following circumstances:
- Where there is no preferred or approved supplier set up in the Finance System
- The purchase is expected to be a one-off from a supplier not already set up on the finance system
- The value is less than £1000 and deemed low value, low volume and low-risk goods and services (e.g. conference registration fees, room hire)
- To pay for goods being ordered from reputable internet online ordering suppliers, in line with this policy
- There is a business critical and urgent purchase requirement that cannot be processed in time as a purchase order. Budget Holder approval to proceed must be sought before placing the order
- Where Suppliers do not accept a purchase order (PO) and payment by card only.
- It is not possible for the individual to access the University’s finance system at the point when the purchase is needed. For example, when travelling abroad and away from campus on University business.
3.2 Only expenditure relating to University business can be purchased using the card. The University Finance Regulations, Expenses Policy, Entertainment Hospitality and Gifts and Travel policies must also be adhered to.
4.1 The following commodities must not be purchased with a purchasing card:
- Cash withdrawals or cash advances
- Temporary labour/staff, including through agencies, or agency fees, temporary staff salaries, people providing services or temporary recruitment (any expenditure that could potentially be covered by IR35).
- Items which qualify for VAT zero rating, e.g. some laboratory purchases. (The purchase card does not produce a zero rate certificate. These types of purchases should be bought by raising a requisition in T1).
- Paying invoices (other than members of Procurement Team)
- Telecommunication services
- Computer Hardware, Software and Peripherals (other than members of Exeter IT)
- Any fuel for personal vehicles
- Chemical compounds, dangerous, radioactive or hazardous materials
- Charitable donations
- Travel costs such as flights/train tickets (this should be through our current TMC Provider or unless agreed with Finance Services).
- Gift vouchers (unless prior agreement provided by the Tax Team)
- Under no circumstances must the card be used for personal purchases.
4.2 Finance Services have blocked card use for certain merchant categories to minimise non-compliant use.
Application and Usage
5.1 Before applying for a purchase card staff should have completed the pre-requisite training listed here.
5.2 Members of staff can apply for a purchasing card by completing the Card Provider application form and the University’s application Declaration of Agreement Form. Finance Services will consider approval of an application based on the likely usage of the card including the merchant categories, the availability of existing cards in that Department and on approval of Finance Services.
5.3 A single transactional limit and a monthly credit limit will be assigned to the cardholder by Finance Services.
5.4 Optionally, a cardholder can nominate another individual to act as the card administer to undertake statement reconciliation tasks. However, the cardholder remains fully responsible for compliance with this Policy.
5.5 The default maximum financial limits are set according to business usage:
Level | Single transaction limit | Monthly credit limit | Indicative usage |
---|---|---|---|
1 | £1,000 | £5,000 | Standard Use |
2 | £2,500 | £10,000 | Frequent Buyers/Travellers |
3 | £5,000 | £25,000 | Significant Buyers/ Travellers |
4 | Unlimited | £50,000 | Procurement Team |
5.6 Requests for increases to these financial limits should be made to Finance Services who will have discretion to approve or not approve such requests.
5.7 Splitting payments for goods across a number of credit card payments should be avoided – cardholder should contact Finance Services for advice on the payment you are trying to process and appropriate course of action. E.g. temporary increase in limits, the Procurement Operations Team to make the payment on your behalf, an invoice is required and paid through T1.
6.1 Understanding the use and purpose of a purchasing card prior to application, and that any breach of the rules may result in disciplinary action. By applying for a purchasing card, you have agreed to use it strictly in accordance with the provisions set out in the Purchasing Card Policy and understand that the University is liable for all charges made on the card.
6.2 Purchasing card monthly statements must be authorised.
6.3 Use the correct budget centre code, project code and tax code.
6.4 Reconcile card transactions on the T1 finance system should be undertaken on a weekly basis and fully reconciled by the end of each month as a minimum. A step by step guide on reconciling your purchasing card can be found on the T1 Training site. Where the cardholder does not reconcile within the required timescale notifications to cardholder will be issued by Finance Services and if no further action by the cardholder it will be escalated to the individual line manager.
6.5 Any discrepancies/errors must be rectified by the cardholder with the supplier directly and the card statement updated with information about the disputed charge.
6.6 Obtain a full VAT receipt wherever available for the purchase. This will enable the University to apply the appropriate VAT treatment. All supporting receipts / invoices must be scanned and attached to the transaction in T1 when you are reconciling your monthly statement. The original paperwork should be retained by the cardholder for a period of 4 years. If the cardholder cannot scan the supporting documentation it should be forwarded manually via internal post to Finance Operations with a copy of the claim (retained for a period of 4 years, or other period if purchases are funded by other sources e.g. research council/EU grant).
6.7 It is vital that budget information is as accurate as possible. Failure to reconcile transactions could result in all transactions being charged to the School / College / Discipline core budget and the card being withdrawn from the cardholder.
6.8 Keep the card safe and secure at all times. Keep any PIN number separate from the card.
7.1 If the cardholder is wrongly billed for a purchase, the supplier should be contacted by the cardholder in the first instance. The receipt is the KEY document to substantiate the error. Both the original transaction and the credit will need to be processed separately through the purchasing card online system. Do not delay the processing of the original transaction due to an outstanding credit or dispute, likewise please ensure all other transactions are completed so your disputed payment can be easily identified as the only transaction not being completed.
7.2 If agreement cannot be reached with the supplier, the cardholder should contact the Card Provider providing full detail including the name and date of the last person from the supplier’s organisation you have spoken with.
7.3 Where there are problems with goods which have not been received or are faulty:
- The cardholder should contact the supplier and request a credit is processed back onto the card. Faulty goods may need to be returned to the supplier.
- On receipt of the weekly statement please check the credit is showing
- Where the credit does not show on the statement the cardholder should contact the supplier again to clarify the date when the credit will be issued.
- In the case of any difficulty in obtaining a credit please contact Finance Services.
8.1 Once a successful application is confirmed the member of staff will be contacted to arrange to receive/collect the card. Prior to receipt the cardholder will be asked to complete the purchase card training detailed on the T1 Training site.
8.2 Cardholders will be asked to sign a Declaration of Agreement Form confirming the cardholder will adhere to this guidance and the University policy and procedures. The cardholder’s signature confirms that they are also aware of the Freedom of information Act under which the University may disclose spending information to third parties. More information can be found on the Freedom of Information pages.
8.3 The cardholder to ensure that the card is kept in a safe place at all times. The cardholder is also responsible for ensuring the card and associated PIN are kept separately.
In the event of the loss, theft or fraudulent usage of an individual’s purchase card, they must immediately report it to:
HSBC Card Services
Lost or Stolen Cards
Telephone: 03456 015 934, open 24 hours a day, 365 days per year
Dedicated Cards Support
Telephone: 03455 873 502, Monday to Friday 9:00am – 17:00pm GMT
Finance Services (Finance Operations Team), Telephone 01392 722777, should also be notified as soon as possible during office hours only.
8.4 It is important that the cardholder remains alert to the illegal use of the card or associated details. There is always a risk of fraudulent transactions by others (including suppliers) and statements must be monitored carefully and any suspicious transactions reported immediately to the Card Provider.
8.5 The card should only be used by the cardholder. In the event of this being breached the cardholder must contact Card Provider immediately and notify Finance Services.
8.6 The cardholder must not share their purchase card details (number, csv number etc.) with anyone else. Sharing your card details runs the risk of your card being used fraudulently, for which you may be held responsible. If you suspect fraudulent activity is happening on your card please ensure you contact the Card Provider to request your card is closed immediately and then inform Financial Services.
- Authorise cardholder applications, providing confirmation that there is a business need for the individual to be issued with a card
- Confirm that the cardholder can spend against your budget, for authorisation and accepting that the charge will be posted to your budget without prior approval
- Recommending the single & monthly transaction limits for the card with justification
- Approving requests for either one-off transaction or permanent increases or decreases in either single transaction or monthly limit, or both
- Ensure that the cardholder has read the Purchasing Card Policy, and agreed to comply with the cardholder responsibilities.
- Ensuring the cardholder uses the card & completes the weekly card reconciliation in accordance with University guidance.
- Monitoring all cardholder transactions & ensuring that disputed transactions are reported & resolved by cardholder to the Card Provider and Finance Services in a timely manner.
- To request the card is returned to the line manager during the cardholder’s leaving interview prior to the cardholder leaving their post at the University and inform Finance Services in writing who will then arrange for the Card Provider to shut the card and account down.
9.1 Any card misuse will be subject to the University disciplinary procedures as set out in the University Code of Conduct. The Chief Finance Officer may remove cards from users in cases of suspected or actual misuse or persistent non-compliance with this Policy. Any cardholder whose card has been withdrawn due to misuse or non-compliance will not be able to apply for a new card without approval by the Chief Financial Officer.
9.2 Cardholders should take extra care not to use the card mistakenly for private purchases. In the event this does occur the cardholder should notify their line manager immediately and arrange for the University to be repaid within 5 working days.
10.1 Finance Services will maintain a register of all cardholders and their details (subject to GDPR), they also have full access to the Card Provider online services and can view cardholder data and run management information reports.
10.2 Finance Services will liaise with the Card Provider on all matters regarding “card administration” as set out in 11.3.
10.3 Changes to cardholder details i.e. a change of name, department, college, or professional service must be reported to Finance Services, who will instruct the Card Provider to issue a new card to the cardholder if appropriate.
10.4 If the cardholder is leaving the University, for an extended period of absence (e.g. maternity) or no longer requires the card - all expenditure on the card created during the notice period must be reconciled and authorised by the relevant line manager as expenditure occurs. Where a leaver has not fully reconciled their card prior to leaving the University, this responsibility will be escalated to the line manager for completion.
10.5 The card must be returned to the line manager prior to the cardholder leaving their post at the University or taking up a new position. It is recommended that this is done at the cardholder’s leaving interview. The cardholder’s line manager should inform Finance Services in writing that the cardholder has left the University employment or changed position. Finance Services will arrange for the Card Provider to block card use and close the account.
11.1 The cardholder must obtain a full VAT receipt for each purchase made.
11.2 For on-line purchases it is essential that the appropriate box is ticked at check out, requesting a VAT receipt. Failure to do so will mean the University cannot correctly determine the appropriate VAT treatment. This could be to the detriment of the University and the College budget.
Appendix 1: Category and Classification of Card Type and Holder
Card Type | Description | Available to: |
---|---|---|
Physical Corporate Credit Card | Physical cards refers to the plastic card issued to a specific person within a department | Procurement Team and approved and dedicated buyers e.g. Exec Admin, Estates, Ex IT, nominated senior managers in PSLT |
Embedded (Lodged) | Embedded (Lodge) cards are embedded into a supplier’s system (e.g. a travel management company for booking travel without having to provide card details for each booking | Procurement Team and dedicated buyers |
Virtual | Virtual cards are a randomly-generated card number associated with a physical payment card which can be used once or multiple times. | Procurement Team and dedicated buyers |
Printable version of the Purchasing Card Policy