Government Purchase Card Training for Approving Officials June

Government Purchase Card Training for Approving Officials June 2012 1

Overview: Course Objectives Ø Module 1 - The Benefits of the Purchase Card Program Ø Module 2 - Purchase Card Usage Ø Module 3 - Training Requirements and the Importance of Monitoring Purchase Card Activities Ø Module 4 - Purchase Card Misuse and Conduct that Merits Administrative Action 2

Module 1: Benefits of the Purchase Card Program Objectives: Ø Understand explain the benefits of the Purchase Card Program Ø Understand the key regulations governing the Program Ø Identify the key roles and responsibilities within the Program Ø Understand the importance of AO duties and responsibilities 3

Benefits of the Purchase Card Program Ø Importance of the Purchase Card Program Ø The Purchase Card Program is a payment and procurement tool used for simplified acquisitions based on individual procurement authority. Ø The Program is the preferred method of procurement for micropurchases, which are generally less than $3, 000. Ø NRCS annually spends close to $20 million in purchase card transactions. Ø Intent of Purchase Card Program Ø The Purchase Card Program reduces administrative costs and allows agencies to procure supplies and services faster. 4

Key Regulations Ø Key regulations governing the Purchase Card Program Ø OMB Circular A-123 Appendix B requires agencies to implement management controls, policies and practices to ensure appropriate purchase card usage. Ø Use of the purchase card must be consistent with the Federal Acquisition Regulation (FAR), Agriculture Acquisition Regulations (AGAR), and Departmental Regulation (DR) 5013 -6 - USDA Purchase Card and Alternative Payment Methods Ø DR 5013 -6, along with supplementing guidance in the “Coordinator’s Purchase Card Program Guide, ” “Approving Official’s Purchase Card Program Guide, ” and the “Cardholder’s Purchase Card Program Guide, ” prescribe the policies and procedures for use of the government purchase card (available on the USDA Charge Card Program Web site at http: //www. dm. usda. gov/procurement/ccsc/pc_guides_ref. htm ). 5

Key Roles and Responsibilities Ø The Agency Program Coordinator (APC) is appointed by the Head of the Contracting Activity Designee (HCAD) and is responsible for managing the Purchase Card Program in each agency. Ø The State Conservationist (STC) oversees the Purchase Card Program in his/her area of responsibility. Ø The Primary and Alternate Local Agency Program Coordinators (LAPC) are responsible for the day-to-day operation of the Purchase Card Program at their respective sites. They work directly with the cardholder, bank contact person, approving officials (AOs) and the APC. All documentation related to the establishment of the approving officials and cardholders will be processed through the LAPC. 6

Key Roles and Responsibilities (cont’d) Ø The AO is generally the cardholder’s supervisor-ofrecord, and has oversight and approval responsibility for the purchase activity of the cardholder. Ø The cardholder is responsible for all purchases made with the purchase card. 7

Responsibilities of the Approving Official The AO is the first line of control over the purchasing activity of cardholders in his/her unit, reviewing cardholder purchase transactions to verify that they are necessary and proper. There also needs to be verification that supplies and services ordered have been received. Duties include, but are not limited to— Ø Determining single and monthly purchase card limits for his/her cardholders, and submitting written request and justification to the LAPC for changes to those set limits. Ø Reviewing transaction documents for all purchases made by cardholders and complete an AO Checklist. 8

Responsibilities of the Approving Official (cont’d) Ø Approving transactions selected for final approval no later than 30 days after a transaction has been reconciled by the cardholder. • Persistent failure to timely and accurately final approve transactions constitutes grounds for revocation of purchase card privileges of all cardholders assigned to the AO and may subject the AO to disciplinary action. • All card accounts assigned to an AO who fails to final approve transactions within 60 days of transaction posting date will be deactivated, absent extenuating circumstances. These deactivated accounts may be reactivated after all transactions are final approved and a request to reinstate is submitted to the LAPC from the AO’s supervisor. Ø Conduct monitoring of purchase card transactions made by cardholders under their purview. 9

Module 2: Purchase Card Usage Objectives: Ø Understand how a purchase card is issued Ø Understand purchase card documentation and receipt retention Ø Understand the importance of cardholders reconciling transactions Ø Monthly Purchase Cardholder Review Checklist 10

Purchase Card Issuance: Ø Prior to requesting a card for a new cardholder, the AO and the LAPC, with input from the STC, shall consider whethere is a business need for the employee to obtain a purchase card. Ø If it is determined that there is a business need for a new purchase card, the AO and LAPC should document, in writing, their decision to request a new purchase card. 11

Purchase Card Issuance (cont’d) Ø The prospective cardholders will complete the mandatory purchase card training. Ø Cardholders and AOs must complete and sign the Cardholders Request for Purchase Card Form, and submit it to the LAPC for processing. All training certificates must accompany the card request form. If the cardholder is warranted, and if the request is for a purchase limit up to the cardholder’s warranted amount, a copy of the cardholder’s most current warrant must accompany the request form. Ø When signing the card request form, potential cardholders and AOs certify that they understand the regulations and procedures, and know the consequences of inappropriate actions as a participant of the Purchase Card Program. 12

Cardholder Application for Purchase Card (Sample) 13

Purchase Card Documentation and Receipt Retention Ø Cardholders are to maintain adequate documentation of all purchase card transactions. This documentation includes funds availability, receipts, purchase requests, packing slips, and electronic confirmation for all purchases. The documents will later be used to verify the purchases. Ø Documentation supporting cardholder transactions must be retained for three years after transaction posting date to ensure a proper audit trail and comply with Departmental regulations. 14

Importance of Cardholders Reconciling Transactions Ø Per USDA policy, only the cardholder may reconcile their individual account, except in extenuating circumstances. Ø Cardholders shall reconcile their transactions no later than 30 days after a transaction appears in US Bank’s Access Online (AXOL) System. The account of any cardholder who fails to reconcile his/her transactions within 60 days after each transaction appears in AXOL will be deactivated by the Credit Card Service Center. All transactions must be reconciled before the purchase card is reinstated. Ø Continuous failure to timely and accurately reconcile transactions shall constitute grounds for management to revoke purchase card privileges, and possible disciplinary action. Ø Cardholders will complete one Purchase Cardholders Review Checklist on all transactions during a month, and submit it with all documentation to their respective AO for review and final approval. 15

Monthly Purchase Cardholder Review Checklist (Sample) 16

Monthly Purchase Cardholder Review Checklist (Sample, Pg 2) 17

Module 3: Training Requirements and the Importance of Monitoring Purchase Card Activities Objectives: Ø Training requirements Ø Oversight by Approving Officials (AOs) Ø Understand the importance of AOs’ document review and final approval within 60 days Ø AO Monthly Review Checklist Ø Understand the use of mandatory supply sources 18

Training Requirements In accordance with OMB Circular A-123, all participants in the Purchase Card Program must be trained on policy and procedures. Ø AOs who are also cardholders must complete all mandatory training modules for both roles. Ø Program participants will certify that they have received the training, understand the regulations and procedures, and know the consequences for inappropriate actions. Ø US Bank and USDA web-based training is required in order to receive a purchase card and gain access to AXOL. A maximum of 4 credit hours will be given to warranted personnel for AXOL training. 19

Training Requirements (cont’d) Ø The NRCS Purchase Card webinar will be conducted annually, and is mandatory for all program participants. States will be notified via email when training is scheduled. Ø USBank and USDA Purchase Card Policy refresher training is required every three years. Certification is required for each module. Program participants will be notified via email when training is needed. NOTE : There are no exceptions or substitutions for required training. 20

Monitoring – Approving Officials Oversight by AOs Ø Oversight of the NRCS Purchase Card Program is essential to ensure that Government funds are used appropriately by mitigating waste, fraud, and abuse and to ensure that NRCS Purchase Cards are effectively handled. Monitoring and reporting are two mechanisms NRCS employs as part of its oversight process. Ø OMB Circular A-123 Appendix B, requires agencies to implement management controls, policies, and practices for ensuring appropriate charge card usage. Ø Diligent oversight is key to sound financial management practices. 21

Monitoring – Approving Officials (cont’d) Ø AOs are the first line of control over the purchasing activity of cardholders in their units. AOs review cardholder purchase transactions to verify that they are necessary and proper, for official government purposes, and that supplies and services have in fact been received. • AXOL Reports help AOs track the monthly reconciliation status for purchase cardholder accounts under their purview. Ø Using transaction documentation (e. g. scanned/hardcopy receipts or packing slips) provided by the cardholder, the AO must review and approve cardholder transactions within 30 days from when they appear in their “Manager‘s Approval Queue. ” 22

Approving Officials’ Document Review and Final Approval Ø AOs shall review all transaction documentation and final approve cardholder transactions no later than 60 days after a transaction appears in AXOL. Ø At the end of each month, LAPCs will send AOs a copy of the Transaction Detail Report (TDR) from AXOL. This report, along with cardholder transaction files, is used to review and final approve all transactions accounted for in AXOL. Ø AOs will complete a Monthly Approving Officials Review Checklist on each cardholder’s transactions during a month, and provide a copy of the review to the cardholder for retention. The AO should retain the original review checklist and the TDR for a minimum of three years. Ø Failure to timely and accurately reconcile transactions shall constitute grounds for management to revoke purchase card privileges of all cardholders associated with that AO, and possible disciplinary action. 23

Approving Official Monthly Review Checklist Approving Officials should complete their monthly checklists as follows: Ø Review the monthly Transaction Detail Report (TDR) provided by your LAPC Ø Compare the TDR and cardholder documentation to ensure each transaction is included and appropriately documented Ø Review transactions in AXOL to ensure information in “Comments” tab is complete and accurate (Date received, Item description, “Green” purchases) 24

Approving Official Monthly Review Checklist (cont’d) Ø Complete the AO checklist on each cardholder, sign and date transaction documents, and return to the cardholder with a copy of the checklist Ø Final approve all AXOL transactions Ø File the TDR and AO Checklist (retain for a period of 3 years) NOTE: The LAPC will review AO transaction files (10 percent) on a quarterly basis and report this information on the LAPC Quarterly Review Checklist 25

Approving Officials Monthly Review Checklist (Sample) 26

Use of Mandatory Supply Sources Ø FAR Part 8 sets forth statutory requirements to acquire supplies and services from priority sources when available. Other sources should be considered for use only after the priority sources have been considered for fulfilling requirements. Ø As of 1 January 2011 all cardholders are to utilize the approved vendors on GSA’s BPA for office supplies and toner. Ø Additional information about USDA’s FSSI Program can be found at http: //www. dm. usda. gov/procurement/ 27

FSSI Approved Vendors for Office Supplies and Toner Pool 1 2 3 28 Vendor Name BPA Number Socio Website Capitol Supply Inc. GS-02 F-XA 001 S www. capitolsupply. com/gov Document Imaging Dimensions GS-02 F-XA 002 S/W www. fssibpa. com Independent Stationers Inc. GS-02 F-XA 003 S www. isgroup. org Metro Office Products LLC GS-02 F-XA 004 S/D www. mymetroofficeproducts. net/fssi Shelby Distribution Inc. GS-02 F-XA 005 SDVOSB www. expressop. com SITA Business Systems Inc. GS-02 F-XA 006 S/D/W www. sitabs. com WECSYS LLC GS-02 F-XA 007 S/D www. wecsysllc. com New York Inkjet LLC GS-02 F-XA 012 S/W www. newyorkinkjet. com/government Stephens Office Supply GS-02 F-XA 014 S/W www. theofficestore. com EZ Print Supplies Inc. GS-02 F-XA 008 S/W www. ezprintsupplies. com Office Depot GS-02 F-XA 009 L www. business. officedepot. com Staples, Inc. GS-02 F-XA 013 L www. staples 4 government. com ASE Direct Inc. GS-02 F-XA 010 SDVOSB www. govtoner. com Cartridge Savers Inc. GS-02 F-XA 011 S/D www. cartridgesavers. com Imaging Systems LLC dba Access Products GS-02 F-XA 015 SDVOSB www. fssitoner. com

Module 4: Purchase Card Misuse and Conduct that Merits Administrative Action Objectives: Ø Identify types of misuse Ø Understand conduct that merits administrative action Ø Understand actions to take if misuse occurs 29

Types of Misuse Improper Purchases are transactions intended for government use but not permitted by law. Ø Unauthorized – Items that are intentionally purchased and are outside of the cardholder’s purchasing authority. • Fuel or fleet purchases • Travel-related purchases • Food purchases Ø Incorrect – Mistakes that are the result of an unintentional error during the purchase process. • Purchased wrong item • Item charged to wrong BOC • Duplicate or split purchase 30

Types of Misuse (cont’d) ØFraudulent – Use of the government purchase card to acquire goods or services that are unauthorized and intended for personal use or gain. Ø Authorizing a non-cardholder to use the card Ø Personal use Ø Card lost or stolen and not immediately reported ØAbusive – Purchases that are excessive, questionable or both, such as Ø $300 day planners Ø Allowable purchase at excessive cost Ø Year-end spending on computer and other electronic equipment could be a questionable “bona fide” need 31

Conduct that Merits Administrative Action Ø Although each case must be evaluated on its own merits, it is within the LAPC’s discretion to suspend cards for a specific time and/or permanently terminate if deemed necessary. Ø The cardholder may be subject to administrative and/or disciplinary action under applicable USDA personnel manual and Government-wide administrative procedures, up to and including suspension and/or removal. Ø An employee may be personally liable to the Government for the amount of any unauthorized transaction and may be subject to a fine and/or imprisonment. Ø Suspected fraud or abuse must be reported. The LAPC must forward all documentation related to the suspected fraud or abuse to the APC, AO, and the Fraud Hotline (800 -US BANK) at the US Bank. 32

Actions to Take if Misuse Occurs Ø Circumstances surrounding each case should be considered when determining the proper type of corrective or disciplinary/adverse action, if any, which may be imposed. Generally, a progression of increasingly severe penalties is suitable. In some instances, the infraction may warrant the most severe penalty for a first offense. Agency personnel may impose, but are not limited to, the following administrative and/or disciplinary actions for negligence, misuse, abuse, or fraud: Ø Verbally counsel and issue a letter of counselling/reprimand to the employee Ø Deactivate, suspend, or cancel cardholder’s purchase card Ø Termination of employment Ø Subject the employee to criminal prosecution 33

Certification Statement I certify as an approving official (AO) that I have successfully completed all required purchase card training for my level of authority. I have read, understand, and will abide by the policies and procedures that govern the use of the Government purchase card at USDA-NRCS, and know the consequences for inappropriate actions. I further certify that I will: Ø examine all cardholder documentation related to card transactions and ensure that purchases are based on a bona fide need Ø resolve any questionable purchases with the cardholder Ø ensure that purchase transactions are properly and timely approved Ø immediately notify the designated LAPC of any suspected cases of misuse or fraud Signature __________________ Printed Name ________________ Date __________ 34