|Number: 9.20||Effective Date: 07/05/2018|
|Responsible Unit: Financial Compliance||Last Revised Date: 07/05/2018|
|Email: firstname.lastname@example.org||Phone: 520-621-3220|
Purpose and Summary
Financial Compliance performs a sample review of Purchasing Card (PCard) transactions on a monthly basis as an internal control and to provide an added level of assurance to units and departments that its cardholders and purchases are within University policy for allowable expenditures on the PCard.
The purpose of this procedure is to provide guidance on self-reporting violations and Purchasing Card Violations issued by Financial Compliance to ensure that violations are issued and handled in a consistent approach.
Arizona Board of Regents Policy, including but not limited to 6-711 Internal Control Responsibilities.
Purchasing Card Policies Manual
This procedure applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.
- Cardholder / Responsible Cardholder: The individual responsible for the card as listed in UAccess Financials.
- Liaisons: The designee acting as the PCard department contact for PCard Administration and Financial Compliance. This title is provided to a person or people through a form that is processed by PCard Administration.
- Notification of Financial Compliance PCard Violation Letter: Formal notice of a violation initiated by Financial Compliance and issued to the Responsible User.
- Purchasing Card (PCard): A University credit card for traditional small dollar purchases that is used wherever Visa is accepted. All transactions made using the PCard must benefit and support the University's mission of education, research and public service and be in compliance with the Purchasing Card Policies Manual and University policy for allowable expenditures.
- Responsible User: The individual who makes the charges or authorizes the charges made on the PCard. This person may be different than the Responsible Cardholder.
- Self-Report of Purchasing Card (PCard) Violation (SRV): A form initiated by the user or their department to report a violation of PCard policy.
Compliance and Responsibilities
The following is a general outline of the responsibilities of the individuals and areas involved with PCard violations:
Department (includes Liaisons, Business Office personnel, Cardholders, Reconcilers, Approvers and Users)
- Ensures all the PCard users review the Purchasing Card Policies Manual.
- Processes an SRV as soon as the transaction is identified as non-compliant. This includes reimbursement when applicable.
- Responds to the Notification of Financial Compliance PCard Violation Letter.
- Processes SRV forms and tracks the number of violations.
- Initiates the Notification of Financial Compliance PCard Violation Letter upon transaction review and identification of a violation of University, ABOR, State and/or Federal policies.
- Communicates and trains departments on allowable purchases under the Purchasing Card Policies Manual and Financial Services Manual.
- Suspends or cancels cards based on Financial Compliance recommendation.
- Suspends or cancels cards for activities including, but not limited to: pyramiding, card sharing, exceeding limits, and failing to reconcile.
- May enact additional requirements including, but not limited to, trainings and exams for: departments, cardholders, liaisons, and/or reconcilers.
- May issue verbal or written warnings, reissues compromised cards, suspends or cancels PCards, and issues violations related to University, ABOR and State policies.
- Upon finding a transaction as being noncompliant, either by the department or by Financial Compliance, the violation will be processed and completed. See information in the sections below related to the violation types.
- The Cardholder or Responsible Cardholder may be personally liable for unallowable PCard charges and may be required to reimburse the University for transactions that violate any applicable laws, rules, or policies, such as personal purchases. Refer to Policy 8.10 Cash Receiving for information on preparing a cash receipt and depositing reimbursement.
- Regardless of how the violation is issued, Self-Reporting Violation (SRV) or Notification of Violation, they are tracked and accumulated in total. Generally after three violations, the card will be suspended or cancelled. The number of violations, the explanation provided for the violation and the length of time between violations will all be considered before cancelling or suspending a PCard. Financial Compliance and PCard Administration collaborate and evaluate all violations.
Self-Reporting a PCard Violation
- Upon identification by the department or individual of transactions that are unallowable, the department or individual completes a Self-Reporting Violation Form.
- A first violation instance may not result in additional communication from Financial Compliance.
- A second violation of the same type or multiples of different types will result in communication to the department and/or may also result in suspension or cancellation of the PCard.
- A third violation will result in communication to the department along with notification to PCard Administration. A third violation will likely result in the PCard being suspended or cancelled.
Notification of Financial Compliance PCard Violation Letter
- When a transaction is identified as an unallowable expenditure through Financial Compliance review, a Notice of Financial Compliance PCard Violation Letter is issued and emailed to the appropriate department(s).
- The department is responsible for completing signatures and other requirements specified.
- A third violation will likely result in the PCard being suspended or cancelled.
Notice of Suspension
- If a notice of suspension is issued, prior to reinstatement, all or any combination of the following conditions may be required:
- Retake the PCard Exam
- Take the PCard Common Compliance Issues training class
- All supporting documentation has been received and reviewed by Financial Compliance
Frequently Asked Questions
- What is the difference between Self-reporting Violations (SRVs) and the Notice of Violations issued by Financial Compliance?
Departments using the Self-Reporting Violation (SRV) form are identifying that an unallowable transaction has occurred at the time of reconciliation/approval, whether inadvertently or intentional. Whereas a Notification of Financial Compliance PCard Violation Letter represents an unallowable expense identified by Financial Compliance during post transaction review.
- How do the violations issued by Financial Compliance differ from violations issued by PCard Administration?
- PCard Administration issues violations related to the banking side of the PCard, which includes, but is not limited to: pyramiding, exceeding limits, auto approvals and card sharing.
- Financial Compliance issues violations for expenditures that are found to be unallowable based upon the Purchasing Card Policy Manual and/or University, ABOR, State of Arizona, and Federal policies.
- Who is responsible for reimbursement when the PCard has been misused?
The Responsible User is required to reimburse the University for unallowable expenses.
- Does the University have the authority to withhold my wages for unallowable expenditures on the PCard?
- The Cardholder who signed The University of Arizona Purchasing Card Individual Credit Card Application has authorized deductions from their salary or from other amounts payable to them, an amount equal to the total of the improper purchases together with interest, costs, expenses and attorney’s fees.
- The Responsible Cardholder who signed The University of Arizona Purchasing Card Department Credit Card Application has authorized deductions from their salary or from other amounts payable to them, an amount equal to the total of the improper purchases together with interest, costs, expenses and attorney’s fees.
- How are PCard violations accumulated?
Financial Compliance tracks SRVs and Notification of Violations and accumulates them in total regardless of type of violation or how they were reported. When evaluating violations prior to suspending or cancelling a card, the number of violations, the explanation provided for the violations, and the length of time between violations are taken in to consideration.
- Can my PCard be suspended or cancelled after a first or second violation?
Yes, Financial Compliance may consider suspension or cancellation of the PCard after review of the transaction details and depending on the severity and circumstances of the violation.
Purchasing Card Policies Manual
PCard Self-Reporting Violation (SRV)
Financial Compliance PCard Compliance Website
Misuse of University Assets
State of Arizona Accounting Manual - PCard Cardholder Responsibilities