State University Procurement Card Policy and Guidelines
September 01, 2004
This policy item applies to:
The State University of New York procurement card program offers campuses an alternative method of purchasing small dollar items. This program is intended to allow campuses the flexibility to streamline local procedures and controls for procuring goods and services. Proper use of the procurement card significantly reduces the time between requestinq, ordering, and receiving goods and services.
In addition to saving time, the procurement card program greatly reduces the volume of accounts payable transactions and the associated administrative costs. This is done by eliminating supplier invoices and consolidating multiple supplier payments into one monthly voucher payment to the procurement card vendor. Currently, the procurement card vendor is paid monthly through an automated clearing house (ACH) via electronic check from the Office of the State Comptroller (OSC). This process contributes to the overall efficiency and cost effectiveness of the program.
According to a recent study by the National Association of State Comptrollers (NASC),
savings related to procurement card use ranges from $24 to $75 per transaction.
A similar study conducted by a commercial procurement card vendor estimates it costs
$67 to process a voucher compared to $11 with a procurement card — a savings
of $56 per transaction. Using the lowest reported savings estimate, $24 per
transaction, the University saved approximately $2.3 million in the 2004/05 fiscal
In 2004, New York State transitioned to a new procurement card vendor, Citibank. Due to the greater acceptability of the Visa card, it is anticipated that the change from American Express to Citibank will greatly increase the number of cardholder transactions and dollar amounts for the next several years.
Operation of the University program follows the basic New York State Procurement
Card guidelines as established by the Office of General Services (OGS). Due
to the University’s flexibility, there may be minor differences in the operation
between the New York State and the University program. Where the operation of
the two programs are different, University guidelines, as noted in this policy manual,
will take precedence.
Procurement card services must be obtained through participation in the State-wide contract administered by the State of New York OGS, Division of Standards and Purchases. As such, the University has adopted an identical Purchase Card Template for Excluded Items by Merchant Category Code (MCC). This MCC template is a comprehensive list of vendor types (e.g., airline, lodging, golf courses, etc.) that are not allowed when using the procurement card. If a cardholder attempts to purchase goods or services from a vendor with an excluded MCC the charge will be declined.
The procurement card is a non-transferable financial instrument assigned to University employees with appropriate purchasing authority. These employees must have proper security clearance within the State University Accounting System (SCSO), and be given access to the AEPC application (procurement card reconciliation tool).
Each campus utilizes a program administrator (PA) who is the liaison between the University, the suppliers, and Citibank. The PA is primarily responsible for cardholder training, account maintenance (e.g., name changes, creating department hierarchies, etc.), new card applications, and general procurement card issues. These campus PA’s must make certain that cardholders are aware of all the responsibilities and privileges associated with the program. Cardholder responsibilities include, but are not limited to, using the procurement card for authorized State transactions only, notifying Citibank and the campus PA immediately if the Visa card is lost or stolen, and following the policies and procedures established within this manual.
Training will be provided by the program administrator for all persons receiving a procurement card. This training will cover the use of the procurement card consistent with New York State policy, as well as University and/or campus purchasing practices. Training must be completed prior to issuance of the card.
Cardholders are issued a single procurement card, which is embossed with their full legal name. The University program does not allow for group or departmental cards. Before receiving the card, all cardholders must sign the New York State Citibank Travel Card / Purchasing Card Acknowledgement Form. This form ensures that cardholders have read and understand the terms and conditions of the program. All cardholders must surrender the procurement card to the University at the request of the campus program administrator or upon termination of employment.
Transaction limits for the procurement card may be set equal to the campus quick pay threshold. While the median transaction limit University wide is $2,500, campuses certified with high levels of internal controls may set the limits as high as $15,000. Campuses may enact additional restrictions on the cards, including lower transaction limits, limiting use to a particular type of vendor (or set of vendors), and or temporarily disabling the card due to non-compliance of responsibilities.
Managerial review of all departmental transactions within AEPC is strongly suggested, however this process is optional. If charges are not reviewed by the department manager, they must be completely reviewed by the accounts payable department before campus certification.
Terms and conditions that constitute misuse and/or abuse of the procurement card are outlined in New York State Procurement Card guidelines. Campuses must refer to the appropriate sections of these guidelines for information on disciplinary steps, and should incorporate them into the written campus- specific procedures for procurement card use.
Voucher payments made to the procurement card vendor (Citibank) are automatically generated by System Administration at the end of each monthly billing cycle. Currently, the billing cycle consists of purchases made from the seventh of the month to the sixth of the following month. An e-mail is sent to members of the University procurement card and accounts payable listservs explaining that the voucher is ready for completion.
This e-mail contains all voucher numbers by campus, the due date for the procurement card bill, and explains that the campus needs to select a payment date to complete the voucher. If the voucher is for an amount greater than the campus quick pay threshold they must send it to OSC for approval. OSC requires that only the voucher is sent for approval – the procurement card bill or any other related paperwork (e.g., receipts, invoices, etc.) should be retained by the campus.
The University is responsible for all charges made within the billing cycle, except
those related to fraud or misuse. Procurement card bills containing charges
related to fraud or misuse will be paid in full by the campus before the payment due
date. After investigation, if the charges are deemed to be fraudulent the procurement
card vendor will credit the campus billing account for the total amount of the fraud.
Cardholders must immediately report all transaction disputes to the campus program administrator. The program administrator must then contact the procurement card vendor directly and complete the Citibank Government Cardholder Dispute Form. This dispute form must be filled out completely and forwarded to Citibank within 60 calendar days of receipt of the campus invoice.
The following information is required to complete the dispute form:
This form may be sent to Citibank by fax (605-357-2019) or conventional mail (address to: Citibank Government Services, P.O. Box 6125, Sioux Falls, SD 57117-6125). Card program regulations require that campuses provide additional billing statements to document the specific item or items being disputed.
In some cases, the Citibank Fraud Protection Unit determines when fraud occurs before charges appear on cardholder statements. This proactive approach may eliminate the need to complete the transaction dispute form. However, it does require Citibank to cancel the current card account number and reissue a new account. New cards will be sent to the campus program administrator within a few days. The program administrator must call the University Controller’s Office with the new account number and then distribute to the cardholder.
Before a cardholder gives any type of account information over the telephone they must be completely certain that they are speaking with a Citibank representative. If there is any question whether the caller is on a phishing expedition for personal information, hang up and call Citibank Government Customer Service at 800-790-7206.
The University Controller’s Office has developed a crosswalk between the Merchant Category Code (MCC) that is provided by Citibank and University subobject codes. This newly established process enables campuses to better track purchases made using the procurement card. For example, if a cardholder purchases office supplies from a vendor with MCC XXXX the corresponding University subobject will be applied to the transaction within AEPC.
The Vice President’s designee, generally the purchasing director at each campus, acts as the campus program administrator (administrator). This campus administrator is responsible for managing all aspects of the procurement card program. The administrator is the liaison between the campus, the suppliers and Citibank.
The campus administrator evaluates cardholder, department and vendor compliance within
the Statewide procurement card program. They may also be involved in evaluating
enhancements to policies and the AEPC application (on the University accounting system).
Additional responsibilities of the position include:
The program administrator is responsible for ensuring that all employees receiving a procurement card are properly instructed on card usage and responsibilities. The are also responsible for ensuring that all cardholders and their immediate supervisor/manager attend training prior to issuance of the card. The University Controllers Office, with the assistance of the Office of General Services (OGS) and Citibank, will provide the necessary literature and training to the campus. These training sessions are designed as a “train-the-trainer” course for the campus administrator and the procurement staff. The administrator, with the assistance of the procurement staff, will provide necessary campus end-user training.
Cardholder training will cover the use of the procurement card consistent with New York State policy, as well as University and campus specific procurement practices. Each cardholder will also be given instruction in the use of the AEPC application.
Upon completetion of the training, the cardholder will sign a copy of the Citibank Cardholder Acknowledgement Form. By signing this form, the cardholder acknowledges that they have read and understand the terms and conditions of the program.
By activating and signing the purchasing card, the employee agrees to participate in the State University purchasing card program and assumes responsibility in accordance with program guidelines. Failure to abide by these terms may be viewed as grounds for disciplinary action up to and including dismissal. These responsibilities include but are not limited to the following:
The purchasing card may not be used for:
If you have questions regarding the appropriate use of the purchasing card, contact your Agency Purchasing Card Program Administrator or Agency Site Coordinator.
To make a purchase using the New York State Purchasing Card, follow the same general procedures used for any type of credit card purchase.
All purchases made using the purchasing card should be supported by store receipts, Visa® charge slips, shipping detail, etc. The documentation must be maintained and stored for reconciliation, auditing and tax purposes. In addition, these documents will be necessary to resolve billing and shipping disputes.
Each month, Citibank will deliver to the cardholder a document referred to as the cardholder activity statement. The cardholder activity statement includes a listing of purchases made and credits received during the monthly cycle. The activity statement is a reference document and not a bill. The cardholder is responsible for verifying all activity listed on the activity statement is accurate. The cardholder may need to refer to previous orders to reconcile credits that may have been posted on the current activity statement.
Cardholder reconciliation procedures include:
There are no definitions relevant to this policy.
In support of this procedure, the following links and/or references to additional resources for related information are included:
Citibank Custom Reporting Quick Reference
Citibank Electronic Reporting System Quick Reference Guide (.pdf)
Citibank List of all MCC Codes (.pdf)
Citibank Online Statement Guide
CitiDirect Cardholder Quick Reference Card (.pdf)
CitiDirect Program Administrator Quick Reference Card (.pdf)
CitiDirect Program Administrator Quick Reference Guide (.pdf)
Credit Card Program Setup Checklist
Employee Liability for State Charges
NYS 2007 Conference Presentation on Information Security & Identity Theft
NYS Procurement Card Blocked MCC Codes (Best Practices)
NYS Training Presentation (PowerPoint)
OGS Citibank P-Card Guidlines
Program Administrator Reference Guide
WARNING - PHISHING SCAMS
There are no procedures relevant to this policy.
Where applicable, this section
contains links and/or references to forms as they relate to this procedure:
Card Acknowledgment Form for Other Authorized Users (Best Practices)
Citibank Cardholder Transaction Dispute (.pdf)
Citibank Electronic Reporting System User ID Set Up
NYS Card Acknowledgement
Program Administrator Setup
Program Administrator Setup (.pdf)
Program Card Acceptance of Risk (.pdf)
Where applicable, this section contains links and/or references to the authority governing this procedure:
Office of the University Controller accounting requirements
There is no history relevant to this policy.
There are no appendices relevant to this policy.