PROCUREMENT CARD (P-Card)
(revised March 2010)
100 P-Card PROGRAM SUMMARY
- 110 Interagency Agreement
- 120 Responsibilities of Key Individuals
in the P-Card Process
- 130 Acceptance of P-Card
- 140 P-Card Allowed for Official State
- 150 Compliance with State Policies
- 160 Reporting of Lost or Stolen P-Cards
- 170 P-Card Card Issuance and Activation
- 180 Rebates Received From UMB Bank
200 P-Card CARD / CARDLESS ACCOUNT OPTIONS
- 210 P-Card Cards
- 220 Basic P-Card Card with Conference
- 230 P-Card Contract Accounts (Cardless
- 240 P-Card Travel Accounts (Cardless
- 250 Automotive P-Cards
300 APPROPRIATE P-Card PURCHASES
- 310 Clarification of Specific Allowable
- 320 Prohibited P-Card Purchases
- 330 Sales Tax
- 340 Request for Program Exception
400 COMPLIANCE WITH STATE REQUIREMENTS
- 410 Sources of State Guidance
- 420 Examples of State Requirements
500 SECURITY ISSUES
- 501 Agency P-Card Coordinator
- 502 Account Numbers on Paperwork
- 503 P-Card Credits
- 504 Lost, Stolen or Compromised Accounts
- 505 Account Maintenance
- 506 Internet Security
600 TRANSACTION DOCUMENTATION, REVIEW AND PAYMENT
- 610 Receipt Documents
- 620 P-Card Transaction Logs
- 630 P-Card Log Reconciliation
- 640 Processing of Purchases Pending
- 650 Payment of Monthly Billing from
- 660 Fiscal Year Determination
- 670 Retention of P-Card Records
- 680 Central Clearing Fund Reconciliation
700 ONLINE CARD MAINTENANCE SYSTEM
100 P-Card PROGRAM SUMMARY
The State of Kansas contracts with UMB Bank for the State Procurement Card (P-Card) program. Participation in the P-Card program allows an agency to process
one monthly payment to UMB Bank rather than processing numerous payment vouchers
to individual vendors throughout the month.
110 Interagency Agreement
In order to participate in the P-Card Program, the agency must complete an Interagency Agreement for Procurement Card Program. The Interagency Agreement specifies agency and Department of Administration responsibilities regarding the agency's P-Card program.
120 Responsibilities of Key Individuals in the P-Card Process
- P-Card Coordinator. The agency P-Card Coordinator is responsible for the overall
operation of the program at the agency, including P-Card issuance and cancellation,
reporting of lost or stolen P-Cards, and changing limitations of expenditures
placed on individual P-Cards. The P-Card Coordinator is also responsible for cardholder
training and shall have authority to enforce compliance with all accounting
and purchasing statutes, regulations and policies to ensure the valid use
of all P-Cards.
- P-Card Reviewer. The P-Card Reviewer(s) is responsible for reviewing transactions
included on monthly P-Card billings received from UMB Bank:
- The Reviewer shall ensure that transaction details per the UMB Bank
billing are reconciled on a monthly basis at the cardholder detail level
and authenticate the validity of each transaction.
- The Reviewer shall ensure that all disbursement data entering the
State accounting system is accurate, authorized, properly coded, adequately
documented, and that the goods and services purchased through use of
the P-Card were received by the agency.
- The Reviewer shall have complete access to all documentation to support
the data entering the accounting system.
- The Reviewer shall immediately follow-up on any unusual P-Card activity
with the cardholder, the P-Card Coordinator and any other appropriate agency
- P-Card Cardholder. The cardholder must be a State employee and is responsible for maintaining security over the P-Card, using the P-Card only for official state business and for compliance with State accounting and purchasing statutes, regulations and policies including all policies the cardholder's agency implements in the use of the P-Card. In addition, the cardholder is responsible for obtaining receipt documents supporting all P-Card transactions, preparing a log of P-Card transactions incurred during each billing cycle and reconciling cardholder statements provided by UMB Bank to receipt documents and the P-Card log for the billing cycle.
- Department of Administration.
- The Department of Administration is responsible for providing ongoing
program information to the P-Card Coordinator and providing necessary assistance
to agencies upon the request of P-Card Coordinator:
Tim Hund (785) 368-6347 (email@example.com)
The Department of Administration is also responsible for auditing the agency's P-Card transactions
on an annual basis to ensure compliance with all applicable accounting and purchasing statutes,
regulations and policies in the operation of the P-Card Program.
- Agency. The agency is responsible for maintaining necessary internal controls and implementing recommendations resulting from audits by the Department of Administration and other independent audits of the Program, including the Legislative Division of Post Audit. Also, the agency is responsible for maintaining written procedures for the agency’s P-Card program.
130 Acceptance of P-Card
The P-Card may be used for appropriate purchases from vendors who accept the
VISA card (in-store purchases, as well as mail, telephone, Internet and fax
140 P-Card Allowed for Official State Business Only
P-Cards are issued at the request of an agency in an employee's name and are the property of the
State to be used for the State purposes defined in this document. Since P-Cards are restricted to
State use only, a cardholder's personal credit history is not reviewed as part of the P-Card issuance
process. P-Card usage is audited by both the agency and the Department of Administration.
- The cardholder may not make personal purchases with the card.
- In the first instance of a personal purchase with a P-Card, the personal purchase
may be left on the P-Card if immediate reimbursement is received from the cardholder.
- State agencies should correct any subsequent personal purchases by reversing
the original charge rather than by receiving reimbursement from the cardholder.
- In addition, the card should be cancelled if personal purchases are made with
the P-Card on an ongoing basis.
- P-Card cards are issued for official State business. Items which will not be paid
through the State accounting system (i.e., funds in the State Treasury) may not
be purchased with the P-Card.
- Cash advances are prohibited P-Card transactions.
150 Compliance with State Policies and Procedures
The P-Card is not intended to avoid or bypass State policies and procedures.
Rather, the P-Card is to be used within the guidelines of existing policies.
Purchases that would not normally be allowed should not be made using a P-Card.
160 Reporting of Lost or Stolen P-Cards
Lost, stolen or compromised P-Cards should be immediately reported to the agency P-Card Coordinator and UMB Bank. Phone numbers for UMB Bank are listed below.
Business hours (Monday through Friday; 8:00 AM to 5 PM)
Other than business hours 800-449-9176
170 P-Card Card Issuance and Activation
- P-Cards are issued in the names of specific State employees. A P-Card should only be used by the employee to whom it was issued. P-Cards should never be shared among employees of a work unit, etc.
- Employees are not personally liable for charges to P-Cards, unless P-Cards
are used inappropriately.
- The agency's P-Card Coordinator is responsible for requesting P-Cards from UMB Bank.
- UMB Bank forwards P-Cards to the Coordinator.
- The Coordinator provides training to cardholders and completes a Procurement Cardholder Agreement, to be signed by the cardholder. The completed and signed Cardholder Agreement should be retained by the agency.
- Upon completion of the above steps, P-Cards are given to the cardholders.
- Cardholders should sign cards immediately and store cards in secure locations.
- The card issuer (UMB Bank) has implemented a card activation feature for all P-Cards. The nine-digit
activation number is the cardholder's social security number unless other arrangements have
been made between the agency coordinator and UMB Bank. This procedure includes new issuances,
normal expiration reissues, and replacement cards for damaged or lost cards. If a cardholder
or coordinator requests a reissue, the account is deactivated immediately. Coordinators are
responsible for ensuring that cardholders are aware of the activation code.
- P-Cards are generally reissued every two years.
180 Rebates Received From UMB Bank
- Agencies participating in the State's P-Card Program receive rebate checks from
UMB bank for transactions charged to P-Cards in the previous calendar year. Rebate
amounts are calculated based on a percentage of the amount of transactions charged
to P-Cards during the rebate period. Rebate rates are summarized below:
Payment Made within 30 days – 1.43% to 1.47%
Speed of Pay – 1.56% to 1.71% (base rebate rate increased by .131% for payments received within 20 days and by .245% for payments received within 10 days)
The Department of Administration receives a percentage of the rebate distribution to offset the cost of administering the program, i.e., annual audits, processing of agreements, conducting training, etc.
- Rebates received should be deposited in the State Treasury and may be coded as
a reduction to current fiscal year expenditures.
200 - P-Card CARD / CARDLESS ACCOUNT OPTIONS
The P-Card program has both carded and cardless options available, as described
210 P-Card Cards
Commodities, capital outlay items and contractual service items (coded in the 2000, 3000 and 4000 series of expenditure sub-object codes) may be charged to P-Cards. Individual P-Card transactions are limited to $5,000 per purchase. Orders charged to P-Cards shall not be split in order to avoid P-Card transaction limits. If account limits are not sufficient for the cardholder’s needs, the cardholder should request that the agency’s P-Card coordinator raise the limits, if appropriate. The ongoing occurrence of split orders will result in Card cancellation.
- Transactions coded to 1099 reportable expenditure sub-object codes are allowable P-Card transactions. These specific codes may be found in the Division of Accounts and Reports Policy and Procedure Manual, Filing Number 7,002 (Uniform Expenditure Classification Sub-Object Codes). The Division of Accounts and Reports has implemented a process to automate 1099 reporting for all P-Card transactions made on or after January 1, 2008. IRS regulations are expected to require Merchant Banks to be responsible for 1099 reporting for P-Card transactions made on or after January 1, 2011. This requirement would relieve the State of 1099 reporting responsibilities for P-Card purchases made on or after that date.
- Agencies are free to establish transaction dollar limits of less than $5,000 ($500, $1,000 or $2,000, for example). In addition, agencies have an option to set limits on the number of daily and billing cycle transactions for each P-Card. Desired P-Card transaction limits should be communicated to UMB Bank.
- Billing cycle limits should initially be set no higher than $10,000 for P-Cards, unless historical usage justifies higher limits.
- P-Cards should always be issued in the name of an individual. Only one regular P-Card should be issued to an individual, unless an exception is approved by the Department of Administration.
- P-Card Accounts with no usage for one calendar year should be reviewed and cancelled if future usage is not anticipated, or deactivated (credit limit reduced to $1) if future usage is anticipated.
220 Basic P-Card with Conference Registration Option
Basic P-Cards issued with the conference registration option are limited
to key individuals within an agency. These cards must be preapproved by the Department of Administration and are limited to $5,000 per purchase. Billing
cycle limits should initially be set no higher than $10,000, unless historical
usage justifies higher limits.
In instances where one night's lodging must be prepaid as a condition of making lodging reservations
for an employee, the one night's lodging prepayment may be charged to an agency P-Card authorized
for registration transactions.
230 P-Card Contract Accounts (Cardless Accounts)
Contract Accounts are established to purchase only those commodities, capital items and contractual services (as specified in Section 210) included on statewide open-end contracts and items offered in the state use catalog (State of Kansas Products and Services Catalog. Items not included on statewide open-end contracts shall not be purchased with Contract Accounts. Transaction limits shall be negotiated with UMB Bank. Billing cycle limits should initially be set no higher than $10,000, unless historical usage justifies higher limits.
240 P-Card Travel Accounts (Cardless Accounts)
Agencies are authorized to establish one central P-Card Travel Account (cardless VISA account) or one P-Card Travel Account at each significant business unit level for the payment of conference registration fees, airfare and car rentals for employee travel on state business.
- In addition, direct bill lodging may be charged to P-Card Travel Accounts
if the agency has received approval from the Department of Administration.
- Billing cycle limits shall be negotiated with UMB Bank and should initially be
set no higher than $10,000, unless historical usage justifies higher limits.
- The use of P-Card Travel Accounts is restricted
to travel for state business, i.e., the P-Card Travel Account shall not be used
for personal travel.
A. Travel Tickets
- Use of the P-Card Travel Account is mandatory for the purchase of all airline travel and optional for rail travel made through the State’s contractor for Travel Agency Management Services. Use of the P-Card Travel Account is optional for purchases of all air and rail tickets not made through the State’s
contractor for Travel Agency Management Services.
- In order for agency employees to use the P-Card Travel Account to purchase airfare
through the contract vendor for Travel Agency Management Services, the agency must
first provide the account number, expiration date and CVV code to the contract vendor.
- As travelers are making reservations through ticket outlets other than the State's
contractor for Travel Agency Management Services, they need to be aware that air
carriers have varying policies regarding the presentation of the actual credit card
used to purchase airfare at the airport.
- Flight insurance is provided to State employees if tickets are purchased with
the P-Card Travel Account.
- State employees are covered by travel insurance if a plane goes down for mechanical
reasons and the traveler's ticket was purchased with the P-Card Travel Account.
- If the ticket is purchased using the P-Card Travel Account, and there is a
mechanical failure of the aircraft and a loss of life of the traveler, there
is coverage of $500,000 which is paid to the estate of the employee.
- If a ticket is purchased using the State of Kansas P-Card Travel Account,
and there is a loss of life of the traveler from an act of "war" or "terrorism",
the employee is not covered by travel insurance. This noncoverage of travel
insurance is a result of the United state being officially " at war" since
September 11, 2001.
- Travelers should not be reimbursed for airfare charged to personal credit cards
prior to the completion of related travel.
B. Direct Bill Lodging
- Charging direct bill lodging to the P-Card Travel Account allows State employees to travel with less out-of-pocket expense. Both in-state and out-of-state lodging arrangements can be charged to the P-Card Travel Account. Transaction limits shall be negotiated with UMB Bank. The agency’s P-Card Coordinator should contact Tim Hund for authorization to charge direct bill lodging to the P-Card Travel Account.
- The agency is responsible for ensuring that lodging rates are within the State guidelines for the particular location and that only room and taxes are charged to the P-Card Travel Account.
- Upon request, UMB Bank will provide the agency with a transmittal document containing account verification information that can be provided to lodging establishments when making reservations.
- While acceptance of the P-Card Travel Account for direct bill lodging is high overall, lodging establishments occasionally will not accept the account for payment of a traveler’s lodging charges. If a traveler experiences acceptance issues, the agency should contact UMB Bank to resolve those issues.
C. Payment of Prepaid Lodging
- One night’s lodging prepayment may be charged to the agency P-Card Travel Account (even if that account has not been approved for Direct Bill Lodging) in those instances where one night's lodging must be prepaid as a condition of making lodging reservations for an employee.
D. Car Rentals
- In order for agency employees to charge car rentals to the P-Card Travel Account, the agency must first provide the account number, expiration date and CVV code to the contract vendor(s) for Vehicle Rental Service.
- The contract vendor(s) will then provide the agency with the vendor’s internal account number that is associated with the P-Card Travel Account. This number should be referenced by agency employees when renting vehicles from the contract vendor.
- P-Card Travel Accounts include a collision damage waiver provision. Therefore, State agencies will have collision damage waiver (CDW) protection when using the P-Card Travel Account to rent a vehicle from the State’s contract vendor(s) for Vehicle Rental Service. State employees should decline the collision damage waiver coverage on the contract vendor’s rental agreement. In addition, the State of Kansas will not pay for other optional products offered by the contractor, such as supplemental liability protection.
E. Expiration Dates for P-Card Travel Accounts
- UMB Bank will communicate new expiration dates and CVV codes to your agency prior to the current expiration date of the P-Card Travel Account. The agency should communicate this information to the contract vendor(s) for Vehicle Rental Service and Travel Agency Management Services prior to the account’s current expiration date in order to avoid disruption in service of the account.
250 Automotive P-Cards
Purchases of fuel for agency owned or rental vehicles may be charged to Automotive
- Two card options are available for Automotive P-Cards:
- Automotive P-Cards assigned to agency owned vehicles - These cards are embossed with the
agency name and vehicle (State tag) number, and are limited to purchases of automotive
fuel and minor vehicle repair / maintenance charges.
- 'Generic' Automotive P-Cards - These cards are limited to purchases of automotive fuel for vehicles rented from the contract vendor for Vehicle Rental Service. Generic Automotive P-Cards are embossed with the agency name and are identified as "Enterprise 1", "Enterprise 2", etc.
- Rental charges for vehicles rented from Enterprise the contract vendor for Vehicle Rental Service should never be charged to Automotive P-Cards or regular P-Cards. Also, repairs for rental vehicles are not appropriate P-Card transactions.
- In order to provide agencies more flexibility in the use of Automotive P-Cards, the Department of Administration has delegated the authority to approve most one-time over-rides of transaction limits for Automotive P-Cards to agency P-Card Coordinators:
- Agency P-Card Coordinators are authorized to directly contact UMB Bank
(by e-mail) to request a one-time over-ride of the transaction limit for
an Automotive P-Card (if the transaction amount does not exceed $1,000).
Agencies are asked to copy A&R on e-mails to UMB Bank when requesting
one-time transaction over-rides.
- Agencies must obtain prior approval from Department of Administration for Automotive P-Card transactions exceeding $1,000.
- We strongly recommend that signatures not be attached to Automotive P-Cards.
(Attaching signatures to Automotive P-Cards restricts usage of the P-Card when the
vehicle is being driven by an employee other than the person who signed the
card.) UMB Bank has indicated that transactions would be authorized if the
following procedures are performed:
- Signature blocks on the back of cards should be left blank.
- Labels stating "For official State business only" should be attached to card
- Card users should be prepared to verify that they are State employees.
- Vendors can easily verify that vehicles are either state-owned or rental vehicles.
- Employees should sign Procurement Cardholder Agreements if agency owned vehicles
are permanently assigned in their name. Although Cardholder Agreements are not required for
cards assigned to "pool" vehicles or for "Generic" Automotive P-Cards, we
recommend that someone be assigned these cards for safekeeping and usage tracking purposes.
- Agencies are encouraged to obtain card jackets for Automotive P-Cards. Cards
and receipts documenting purchases can be stored in card jackets and vehicle
keys can also be attached. Use of card jackets can significantly reduce the
number of lost receipts, which continues to be an ongoing problem for Automotive
P-Card programs throughout the State.
- Federal excise tax is charged when automotive fuel is purchased with Automotive
P-Cards. Each agency is responsible for taking appropriate action to claim any
refunds of federal excise taxes available to the agency.
- At the close of each quarter, the Division of Accounts and Reports
sends each agency a report extracted from STARS that lists all motor fuel
purchases made by the agency. Object codes included in the this report
3510 - Gasoline
3530 - Gasohol
3550 - Aircraft Fuel
3910 - Agricultural Supplies, Materials and Parts
- Agencies are asked to verify that the purchases included federal excise
tax, and add the number of gallons purchased, along with the appropriate
excise tax rate per gallon. (The refund rate is based on the date of purchase
and type of fuel. The appropriate rates for each quarter will be included
in the cover letter sent with the report.)
- The Division of Accounts and Reports accumulates the completed reports
and submits a consolidated excise tax refund request to the federal government.
- When the refund check is received, it is deposited into the appropriate
agency accounts via journal voucher.
- Please contact Natalie Fairbank at 785-296-5304 (Natalie.Fairbank@da.ks.gov) if you have questions regarding federal excise tax
300 APPROPRIATE P-Card PURCHASES
In addition to the general guidance provided in Section 200 regarding P-Card
usage, clarification regarding the appropriateness of specific purchases is
310 Clarification of Specific Allowable P-Card Purchases
- Hazardous chemicals and materials, controlled substances and radioactive materials may be
purchased with the P-Card, if the cardholder has the appropriate certifications on file with the
vendor. VISA has no restriction on the purchase of these types of commodities other than that
they must be obtained legally. If the vendor is willing to accept orders using the P-Card, it
is the vendor's responsibility to ensure that the appropriate paperwork is on file with its
- Animals (for lab or research use) may be acquired with the P-Card.
- Purchases may be made from vendors located in Canada, Australia and the United Kingdom. All other international purchases will be rejected by the transaction verification / approval process, unless prior arrangements have been made by the agency P-Card Coordinator with UMB Bank.
- Internet purchases are allowable P-Card transactions. Refer to best practice
information regarding Internet purchases at http://www.da.ks.gov/ar/genacct/audit/P-Card.htm.
- The agency P-Card Coordinator should always review PayPal transactions to ensure that items purchased and vendors used were appropriate for official State business. Agencies frequently purchase items on-line from vendors that use PayPal as the payment vehicle. While there are benefits associated with purchasing items from vendors that use PayPal as the payment vehicle (items frequently are not available elsewhere and are often priced lower than at other sources), use of PayPal can result in using vendors that are normally blocked electronically by the transaction verification / approval process.
- Cardholders should never use personal PayPal and ebay.com accounts for State business. When State business requires using these services, the cardholder should set-up an account specifically for State business.
320 Prohibited P-Card Purchases
The items listed below are prohibited P-Card purchases:
- Alcoholic beverages
- Business cards
- Cash advances
- Construction, renovation or installation
- Food (Food purchases are acceptable for agencies with persons under their care
including, but not limited to: inmates – prisons; patients – hospitals;
students – higher education institutions and residential education facilities;
In addition, food purchases are allowable if fees are collected for the purchase
of food from meeting attendees or if food items are purchased for classroom /
- Hospitality or Entertainment (Hospitality purchases are allowable if the following
requirements have been met: Paid from the agency’s official hospitality
funds; In compliance with PPM 3,351 – Official Hospitality Guidelines; Required
internal agency approval for hospitality is attached.)
- Honorariums (including reimbursement of travel expenses)
- Incentive earnings (ward or inmate)
- Personal items
- Purchases from other State agencies – Payment for purchases from other
State agencies should always be processed as interfund transactions (e.g., items
purchased from Kansas Correctional Industries, etc.).
- Real Estate Leases
- Recruitment expenses
- Travel and travel related expenses:
- Conference registration
fees, airfare and car rentals are allowable charges to P-Card Travel Accounts
(cardless accounts). In addition, direct bill lodging may be charged to
P-Card Travel Accounts if the agency has received prior authorization from
the Department of Administration.
transactions are allowable on carded P-Cards with the Conference Registration
airfare and car rentals are specifically prohibited for carded P-Cards unless
the agency has received prior authorization from the Department of Administration.
- Meals are always prohibited
- Weapons and ammunition (except for law enforcement purposes)
330 Sales Tax
Since the State of Kansas is exempt from paying Kansas sales tax, no sales
tax should be charged for P-Card purchases made in the State of Kansas. Cardholders
should inform vendors that the purchase is exempt from Kansas sales tax before
the purchase is processed. K.S.A. 79-3606(b) is the statutory reference for
the sales tax exemption and is included on the back of the P-Card. When Kansas
sales tax is inadvertently included in a transaction, agencies are not required
to subsequently obtain credit for tax paid if the sales tax associated with
the transaction is five dollars or less.
340 Request for Program Exception
- In order to provide agencies more flexibility in the use of the P-Card, agency P-Card Coordinators may authorize one-time over-rides for purchases of items (within the guidelines of existing policies) costing less than $5,000 from international vendors or from vendors with blocked merchant category codes. In addition, the agency P-Card Coordinator may authorize the one-time purchase of items exceeding $5,000 from statewide open-end contracts. Ongoing purchases of items exceeding $5,000 from statewide open-end contracts should be charged to P-Card Contract Cardless Accounts.
- Agencies must request one-time approval from the Department of Administration for all other program exceptions. An example of a program exception requiring approval from the Department of Administration is the emergency purchase of an item exceeding $5000 on a P-Card.
- In order to obtain a program exception, the agency P-Card Coordinator should send an E-Mail message to the Department of Administration (Tim Hund and Jill Martin) and UMB Bank (Ron Sager and Matt Wagner) prior to purchasing the item. Include transaction details in the message (vendor, dollars, description of item to be purchased, cardholder name and any other pertinent details).
- The Division of Accounts and Reports will reply to "all" that the transaction is approved or disapproved.
- If the transaction would be rejected by UMB's transaction validation system at the time of purchase, UMB will temporarily assign an override strategy to the account.
- Agencies should retain copies of exception approval documents with transaction documentation in agency P-Card files.
400 COMPLIANCE WITH STATE REQUIREMENTS
Use of the P-Card does not exempt a state agency or its officers and employees from complying with
statutory requirements and the State's purchasing and accounting guidelines.
410 Sources of State Guidance
Guidance regarding specific issues can be obtained from the following sources:
- The Division of Accounts and Reports Policy
and Procedure Manual
- Kansas Statutes Annotated
- Kansas Administrative Regulations
420 Examples of State Requirements
Examples of state accounting and/or purchasing requirements include, but
are not limited to, the following items:
- Required purchases (K.S.A. 75-3321) from the State of Kansas Products and Services Catalog (State Use Catalog).
- Required purchases from Kansas Correctional Industries (K.S.A. 75-5276).
- Required purchases from statewide open-end contracts. If you have specific questions, please
contact your agency's Purchasing Director or the Division of Purchases.
- Transactions with other state agencies shall be processed as interfund
- Capital items charged to P-Card cards shall be included in the agency's inventory records.
The agency is responsible for compliance with the requirements of Filing No. 13,001 (Property
Inventory) of the Accounts and Reports Policy and Procedure Manual.
- The agency is responsible for compliance with the requirements of this
500 SECURITY ISSUES
Each agency is responsible for establishing an appropriate internal control
environment for P-Card responsibilities, including approvals, audit ability, adjustments,
record keeping, reporting, reconciliation, segregation of duties and supervision.
501 Agency P-Card Coordinator
The agency P-Card Coordinator may not be a P-Card cardholder.
502 Account Numbers on Paperwork
Please be aware that "active" account numbers are included in the
paperwork supporting the payment to UMB Bank. These account numbers could
be used to make unauthorized charges to P-Cards. We suggest that agencies restrict
access to supporting paperwork while the UMB billing is in-process and that
paperwork be filed in a locked file cabinet once the billing has been paid.
503 P-Card Credits
- The agency is responsible for ensuring that outstanding credits are subsequently
received and for following-up with vendors and UMB Bank, as necessary.
- Credits for items returned to vendors should always be posted to a cardholder's P-Card account.
Cardholders should never accept cash refunds or store credits for returned items.
504 Lost, Stolen or Compromised Accounts
Lost, stolen or compromised P-Cards should be immediately reported to the agency
P-Card Coordinator and UMB Bank for cancellation. (Refer to paragraph 160 of
this document.) Also immediately report any unexplained charges on the P-Card
statement to the agency P-Card Coordinator and UMB Bank.
505 Account Maintenance
Agencies are responsible for performing periodic reviews of P-Cards and communicating
required changes to UMB Bank on a timely basis.
- P-Cards that have been dormant for more than one year should
be cancelled, if future usage is not anticipated. Cancellation of P-Cards with
less than three transactions per year is also strongly recommended, if usage
is not anticipated.
- P-Cards that have been dormant for more than one year should be deactivated (credit limit reduced to $1), if future usage is anticipated.
- Override strategies requested by agencies for specific P-Cards should be immediately
cancelled once the associated transactions have been processed.
- Transaction or billing cycle limits that are unnecessarily high should
- The return of P-Cards to the agency P-Card Coordinator should be incorporated into the agency's exit interview process to ensure that "active" P-Cards are cancelled and properly accounted for. In addition, transactions charged to P-Cards in the billing periods directly preceding and following the cardholder’s termination date should be reviewed closely.
- Also, the Department of Administration will review transaction limits,
dormant and low usage P-Cards, and P-Cards with over-ride strategies on a periodic
basis. The Department of Administration will communicate desired changes
to the respective agencies.
506 INTERNET SECURITY
Suggested best practices for shopping on the Internet are listed at the home page for the Procurement Card Program. Be aware that an outside party could gain access to your P-Card account
number if a vendor's Internet site is not secure. Also, never provide your personal information
to a vendor (social security, bank account or personal phone numbers or your home address).
600 TRANSACTION DOCUMENTATION, REVIEW AND PAYMENT
Cardholders are responsible for obtaining receipt documents for all transactions,
preparing transaction logs for each billing cycle and ensuring that transaction
information per these documents is consistent with statements received from
UMB Bank for the billing period.
610 Receipt Documents
Receipt documents are critical to the overall internal control of the State
- Itemized receipt documents, issued by vendors, supporting all transactions
charged to the P-Card during the billing cycle must be attached to the P-Card
log and be filed in one location. Missing documentation is not indicative
of a strong internal control environment.
- Examples of receipt documents include charge receipts, invoices, packing
slips, screen prints, etc.
- If a receipt document cannot be obtained from a vendor, we recommend
a note summarizing the transaction be prepared and retained. A note is also
recommended if the only documentation provided is a credit card charge receipt,
which does not include transaction details.
- Receipt documents must contain a description of the items purchased that
is sufficient to support the coding used.
- If a vendor provides a packing list, but not an invoice, write the missing
information on the packing list. Also write "only receipt available"
on the document.
- Unit cost, quantity and total cost must be available on the P-Card log or
other supporting documentation.
620 P-Card Transaction Logs
A P-Card log (electronic or paper) must be prepared if items are purchased with the P-Card during the billing cycle. The purpose of the P-Card log is to provide a basis for the cardholder and agency to control and monitor P-Card transactions. (Upon implementation of SMART, agencies that utilize the SMART P-Card module will not be required to prepare separate transaction logs.)
- The P-Card log shall include columns to record the following information for each transaction:
vendor name; order date; amount; description; expenditure sub-object code the transaction will
be charged to; the statewide open-end contract number for items purchased from statewide contractors.
Additional information can be included on the log, at the agency's discretion.
- The amount of each P-Card transaction shall be posted as a separate item on the P-Card log. Posting
the net amount of multiple transactions detracts from the log's usefulness as an internal control
- Always post disputed transactions to the P-Card log. Care shall be taken
to write necessary supporting notes on the P-Card log regarding such transactions.
630 P-Card Log Reconciliation
- The P-Card log shall be reconciled to supporting receipt documents and the
associated monthly P-Card cardholder statement received from UMB Bank, as soon
as possible after the statement has been received.
- Any differences between the P-Card log and the UMB statement should be documented
on the P-Card log. Examples of such differences include partial shipments,
damaged goods received, etc. Contact the vendor or UMB Bank to resolve disputed
transactions and to obtain credits on future cardholder statements. Refer
to Section 640 for guidance on processing purchases pending credit.
- Also, agencies occasionally discover that the transaction amount on the
UMB statement and the receipt document are different. An agency is not required
to obtain credits for small dollar differences (under five dollars per transaction)
between statement and receipt documents.
- Special care should be taken when reconciling registration transactions. On occasion, vendors
may not contact your agency when a registration transaction is rejected due to problems with
the vendor's merchant category code. If a registration transaction has not been posted to the
UMB statement on a timely basis, we recommend that your agency confirm the status of the transaction
with the vendor.
- The P-Card cardholder shall sign and date the completed and reconciled P-Card
log (unless he Department of Administration has approved an alternative
- The supervisor / reviewer of the P-Card Cardholder shall indicate his /
her approval of the completed and reconciled P-Card log by attaching his /
her signature and date to the log (unless the Department of Administration
has approved an alternative procedure).
640 Processing of Purchases Pending Credit
- Expenditure sub-object code 3999 (P-Card Purchases Pending Credit) has been established to streamline the accounting for situations in which the agency is disputing a transaction(s) (i.e., the agency has filed a dispute form with UMB Bank) included on the UMB monthly billing and a credit memo has not been posted to the cardholder account during the same billing cycle in which the original purchase was made. Use of code 3999 is optional, but is encouraged if your agency does not have alternative procedures for tracking credits due from vendors.
- In the first month, charge disputed transactions to object code 3999
to indicate a "pending credit purchases" status.
- In month two, when credit is received for transactions disputed in
month one, the amount charged using this object code in month one will
be included on the payment voucher using transaction code (TC) 755 and
object code 3999.
- Use separate transaction entries on the UMB payment voucher to record (1) credits received
on the current month's UMB billing for prior month's disputed transactions and (2) disputed
transactions on the current month's UMB billing.
- The net result of this procedure is that once a credit for a disputed
transaction has been posted to STARS, offsetting debits and credits
should both have been posted to object code 3999.
- Credits received on the UMB statement shall be posted as separate items on the current month's
P-Card log. Never change the original P-Card transaction amount on a prior month's P-Card log when a
credit is received. Instead, cross-reference credits received to the prior month's log on which
the transaction was posted.
650 Payment of Monthly Billing from UMB Bank
- Approved P-Card logs, with supporting receipts and statements attached, shall be forwarded to
the agency accounting staff for the payment of the agency's monthly P-Card billing from UMB Bank.
- Payment shall be made to UMB Bank for the total P-Card billing amount, regardless
of whether the agency is pursuing credits or charges are being disputed
(unless the Department of Administration has approved an alternative
procedure). Credits for such items can be obtained on subsequent billings.
Refer to paragraph 640 for additional guidance.
- Vendor ID 0000038584, Vendor Location 001, shall be used.
- To ensure correct application of payments, the complete 16 digit control account number (not the cardholder's individual card number), to which the payments are to be posted, should be included in the "invoice number" field.
- The agency is responsible for contacting UMB Bank to resolve any past due balances or credit balances carried forward to the current billing from previous billings.
660 Fiscal Year Determination
All P-Card transactions posted to cardholder accounts on the P-Card statement(s) received from UMB
Bank in the month of June are considered to be old Fiscal Year transactions. Transactions not
included on the June P-Card statement (for the period beginning after the June statement cut-off
date and ending on June 30) can be charged to the old or new Fiscal Year, at the agency's option.
This is an opportunity to reduce the number of encumbrances required at year-end. If a listing
of P-Card transaction activity between the June P-Card statement cut-off date and June 30 would be
helpful, the agency P-Card coordinator can contact UMB Bank and make arrangements for delivery of
670 Retention of P-Card Records
Itemized receipt documents, P-Card logs, and UMB statements (for each P-Card card
account) shall be maintained in accordance with the Public Records Preservation
Act (K.S.A. 45-401 et seq.).
680 Central Clearing Fund Reconciliation
If your agency pays the UMB monthly billing from a central clearing fund
for agency-wide P-Card transactions and is subsequently reimbursed by individual
agency departments, it is critical that your agency maintain a reconciliation
schedule with which to track reimbursement amounts due to the central clearing
fund from individual departments. Central Clearing Fund Reconciliation Schedules
shall be maintained in accordance with the Public Records Preservation Act
(K.S.A 45-401 et seq).
700 Online Card Maintenance System
UMB Bank has made an online card maintenance system available to all agencies. With access to this optional system, agency P-Card coordinators can electronically update transaction limits, put temporary override strategies in place, set up new accounts, order replacement cards, change card strategies, give accounts an inactive status, and close accounts. Use of the online card maintenance system can significantly increase your agency’s ability to respond to the needs of cardholders in a timely manner, especially during non-business hours.
P-Card coordinators are encouraged to take advantage of this opportunity to more fully manage their agencies’ P-Card programs. If your agency would like to take advantage of the online card maintenance system, please contact UMB Bank and complete a user access form that the Bank will provide. The P-Card Coordinator will coordinate access to the system for their agency and should sign the user access form as program administrator.
Standard strategies for the Statewide P-Card program are included on the Kansas P-Card Program – Standard Strategies Schedule, which is available upon request from the Department of Administration.
- Strategies allow an agency to define a P-Card’s transaction limit and valid vendor types, based on Merchant Category Codes (MCCs) for a P-Card.
- Temporary over-ride strategies may be utilized by an agency for certain transactions, as defined in Section 340 of the Procurement Card General Procedures. When selecting an override strategy, the agency should select the most restrictive override strategy that will allow a specific transaction to process.
- Certain vendors (or specific credit card terminals) have been hardcoded into certain strategies (for example, specific contract vendors have been coded into the strategy used for cardless contract accounts.)