1. PCARD TRAINING FOR CARDHOLDERS Office of Procurement & Real Property Management July 24, 2014

2. New Policy – PCard Preferred Method for Small Dollar Purchases PCard will be Preferred Method of Small Dollar Purchases <$2,500 To Improve Efficiency & Effectiveness of UH’s Small-Dollar Procurements

3. New Policy – PCard Preferred Method for Small Dollar Purchases Issues & Concerns: Increased Potential for Misuse Exposure to Financial Losses Maintaining Control Over Spending

4. New Policy – Preferred Method for Small Dollar Purchases Justification Required for Purchases <$2,500 that are Made on PO Enter Statement or Pull Common Reason from Justification Table Common Reasons on Justification Table Justification Will Not Appear on PO

5. Preferred Method for Small Dollar Purchases - Exceptions to New Policy Vendor does not accept credit card or MasterCard Purchase above Cardholder’s Limit Vendor assesses fee for credit card purchase Real Property Leases & Rentals Legal Services High Risk purchase Vendor requests payment to a third party Other reasons where PCard is not a viable option for purchase Stipend payments Payments for scholarship & fellowship

6. New Policy – PCard Preferred Method for Small Dollar Purchases Purpose of New Policy to Improve Efficiency & Effectiveness of UH’s Small-Dollar Procurements Streamline & Improve Process While Maintaining Prudent Fiscal Control Revise Purchasing Card Program Goals Update Purchasing Card Policies & Procedures Transition to More Robust Electronic Processes

7. PCard Goals Revised Old: Simplify & Expedite Procurement Process for Small Dollar Goods & Services New: Provide Operational Efficiency for Purchase of Small-Dollar Goods & Services w/out Sacrificing Fiduciary Control PCard is a Privilege

8. Transition to Newer & More Robust Electronic Processes - PCDO PCDO New Kuali Module for Purchasing Cards Facilitates Business Workflow Eliminates Need for Manual Logs Provides Electronic Routing of PCard Transactions for Approval Allows PCard Transactions to be Reallocated Directly in UH’s Financial System Accounts & Object Codes Validated Immediately Charges Can Post to General Ledger Balances More Promptly

9. Transition to Newer & More Robust Electronic Processes - CentreSuite Discontinuing PVSNet Using CentreSuite to Supplement PCDO Newer, Improved Card Management Tool Real-Time Data Higher Level of Self Service Easy to Use View Transactions Prior to KFS Feed Transaction Details (Level 3 Data) View Approvals & Declines View Statements

10. CentreSuite

11. Expense Module

12. CentreSuite – Expense Module

13. New PCard Button on Requisition New “Issue by PCard” Button on Requisition Allows FA to use requisition to obtain pre- approval for PCard transaction

14. Built-In Controls – Card Limits PCardholder Limits Maximum Transaction Limit: $2,499 Maximum Card (Billing Period) Limit: $24,999

15. Built-in Controls - Blocked MCCs Merchant Category Codes (MCCs) are Assigned by Vendor’s Merchant Bank Based on Type of Goods or Services That Vendor Typically Provides Blocking Certain MCCs Provides a Measure of Protection vs Unauthorized or Prohibited Purchases By Policy, UH has Established that PCard Cannot be Used at Certain Categories of Vendors & Blocked their MCCs

16. Built-In Controls - Blocked MCCs Since Cardholders Have Different Purchasing Needs, Created New MCC Exception (UHDec) Groups Categorized by Job Duties Basic Cardholder Business Unit (Fiscal Support) Interisland Traveler Traveler Operational Unit (relating to operations, facilities) Research Assignment to UHDec Group Based on Various Factors Changes Require Justification

17. Guidelines for PCard Use No Personal Use Use Must be in Accordance w/ All Pertinent Policies, Procedures, Guidelines & Regulations Understand What CAN & CANNOT be Purchased w/ PCard Ensure Purchases Have Legitimate Business Purpose & are in Best Interest of University Adhere to Purchase Limits & Restrictions of PCard Don’t Misuse Card Reimburse UH for Improper Purchases Parceling is Prohibited

18. Guidelines for PCard Use Parceling Artificial or Intentional Division or Fragmentation of a Purchase of Same, Like, or Related Items of Goods, Services, or Construction into Several Purchases of Smaller Quantities, in Order to Evade Procurement Requirements or Limits of Delegated Purchasing Authority Multiple Expenditures Shall Not be Created at Inception of a Transaction so as to Evade PCard Limit

19. Guidelines for PCard Use Don’t Allow Others to Use your PCard Retain Itemized Receipts for Purchases Obtain Support Documentation (Appropriate Forms & Approvals) Certify Receipt of Goods & Services Ensure Purchases Do Not Exceed Budgeted Funds Safeguard PCard Do Not Accept Cash in Lieu of Credit Report Lost, Stolen or Compromised Cards Immediately Notify FA or Dept PCard Coordinator Prior to Transferring or Terminating Employment

20. Guidelines for PCard Use Report Disputes in Timely Manner FHB Must be Notified w/in 60 Days of Cycle in Which Item First Appears on Cardholder Statement Ensure Appropriate Credit Appears on Account Utilize SPO Price/Vendor Lists & UH Requirements Contracts Cardholders Utilizing Extramural Funds Must Comply with OMB Circular A21, Section J Rebates, Free Gift w/ Purchase Foreign Transaction Fee Third Party Providers (e.g. PayPal)

21. Restricted Commodities - Inappropriate Use Restricted Commodities Items Listed in A8.225, Limitations in Purchasing Items of Personal Nature Contributions or Donations Controlled Substances Firearms & Ammunition Payments to Individuals Non-Business Related Goods & Services

22. Don’t Use PCard for Purchases That Require Contract PCards May Not be Used for Purchases that Require a Contract PCards May Not be Used to Pay Against Contracts or Purchase Orders PCards May be Used in Lieu of Maintenance Contract when 1) Scope of Work is Simple and 2) Agreement Provides for One-Time Payment or One Time Servicing

23. Purchasing Requirements Purchasing Requirements for Various Types of Goods & Services Refer to Procurement Section of APM, A8.200-A8.299 Not Allowed to Use PCard for Certain Goods/Services Legal Services Real Property Leases & Rentals Services on Contractual Basis (UH Services Contract) Some Goods & Services Require Authorization in Advance Hazardous Materials (Hazardous Materials Mgmt Office) Biological Commodities (Research Compliance Office)

24. Purchasing Requirements Certain Goods & Services Require Approval/Authorization/Review in Advance Insurance (must be submitted for review & processing by Office of Risk Management) Travel Related Expenses Business Cards Repairs & Alterations to Buildings & Grounds (FPMO) Keys & Lock Service (FPMO) Leis (amt. must be determined reasonable by FA) Telecom Equipment & Service (proposed procurement actions should be forwarded to ITS for approval) Information Technology Hardware, Software & Services (contact ITS in advance to determine whether requirement can be fulfilled internally & whether there are internal guidelines for compatibility or support)

25. Purchasing Requirements Certain Goods & Services Have Other Requirements Meals & Refreshments – Form 56 or 136 Construction – approving & reporting requirements, minimum wage & skilled tradesperson clauses Organizational Membership – must benefit UH & be directly supportive of departmental function & have a reasonable & acceptable cost/benefit ratio Car Rentals – confined to compact & subcompact vehicles unless reasons exist to justify need for larger vehicle Ethyl Alcohol – restricted to certain UH programs, must be obtained from Chemistry Dept. on Manoa campus via IDO

26. Original Receipts Original Receipts Preferred In accordance w/ Section 40-57.6, HRS, the State Comptroller has determined the acceptability of the following documents submitted in lieu of an original bill for purchases made by PCard: Sales slip or charge receipt Electronic purchase confirmation (for internet purchase Itemized packing slip E-mail confirmation of purchase Above Documents Must Have: Vendor’s Name Date of Purchase Description Cost of Goods Purchased

27. Meals & Refreshments (A8.265) 5)Where the purchase of meals &/or refreshments utilize special, revolving &/or endowment funds (unless expressly precluded by the terms & conditions of the fund) & are for University events & activities excluding internal staff meetings, training sessions, and similar activities; provided that the purchase is: a)necessary, reasonable in cost, & appropriate to the particular University event or function; & b)approved by the President, a Vice President, Chancellor, or their designees.

28. New Three Strike Violation Process for Non-Compliance Following Will Subject Cardholder to Three Strike Violation Process: Card used for Personal Use or Unauthorized Purposes Purchase is Parceled Purchase Split Among Cardholders to Circumvent Purchasing Card Limit Failure to Approve the PCDO eDoc within a Reasonable Period of Time (e.g. by next billing cycle)

29. New Three Strike Violation Process for Non-Compliance Failure to Provide Adequate Support Documentation for Purchases Failure to Provide, when requested, Information About a Specific Purchase Violation of Grant Restriction or Requirement Misuse (wide range of violations, some of which are more severe than others)

30. New Three Strike Violation Process for Non-Compliance Three Instances of Non-Compliance May Result in Revocation of PCard Violation #1 Notification Sent to All Parties Notification Placed in Dept’s Violations File Notification Serves as Warning & Explains Corrective Action Necessary

31. New Three Strike Violation Process for Non-Compliance Violation #2 Meets w/ PCard Administrator, Director of Procurement &/or VP for Administration Purpose of Meeting Discuss Problem Provide Additional Training Documentation Placed in Dept’s Violations File

32. New Three Strike Violation Process for Non-Compliance Violation #3 May Result in Immediate Termination of PCard Repeated Violations w/in Department May Result in Entire Department Losing PCard Privileges for One Year

33. Serious Violations If Cardholder’s Offense Deemed to be Deliberate, Fraudulent or Illegal Misuse, Cardholder’s Account May be Terminated Immediately & Cardholder May be Held Liable for Total Amount of Prohibited Purchase May Subject Cardholder to Disciplinary Action, up to & Including, Termination of Employment, in Accordance w/ Applicable Collective Bargaining Agreements & UH Admin. Procedures

34. Serious Violations Matter May be Referred to UH General Counsel for Appropriate Civil Action vs Cardholder to Recover UH Funds Expended as Result of Unauthorized &/or Inappropriate Use of PCard Will Determine Appropriate Course of Action for Serious Violations of PCard Policies

35. Compromised Cards Compromised Card Card that is at risk of being used fraudulently Card information may have been obtained by unauthorized individual(s) FHB notifies Cardholder by phone that card may have been compromised WATCH on Account If FHB’s Fraud Unit suspects fraud, WATCH is placed on account Once WATCH is placed on account, subsequent transactions are declined until WATCH is removed

36. Compromised Cards WATCH on Account Usually Generated by Foreign Transactions Much of Fraud Comes from Overseas Notify PCard Administrator when traveling overseas What to Do Check CentreSuite Return FHB’s Call or Notify PCard Administrator Verify Transactions Dispute Unauthorized Transactions That Have Posted to Account

37. FAQs from Tax Treatment Webinar Q: Can I use PCard to purchase airfare on behalf of stipend recipient? A: Do not use PCard to purchase airfare. This is because there is no mechanism in the bank PCard system to capture the data that is used to determine resident status and purpose of the trip…. Q: With the changes in PCard & preference to use PCard instead of PO, can we continue w/ small PO process for 3 rd party payment on behalf of stipend recipient? A: Yes. In fact, we ask you to make stipend payments using purchase order process, if possible… Q: If we receive a WH-1 before making a hotel reservation, could we use our PCard to pay for the non-employee foreigner’s lodging? A: Do not use a PCard to purchase non-employee foreigner’s lodging….. Tax Treatment Webinar powerpoint presentation is posted on the UH FMO website www.fmo.hawaii.edu/fmo/www.fmo.hawaii.edu/fmo/

38. PCard Shopping Tips Effective Jan 2013, Vendors in US Permitted to Impose Surcharge on Consumers When They Use Credit Card Retailer must notify customer before customer makes actual purchase, or in an online environment, on first page that references credit card brands Retailer must disclose surcharge fee on every receipt Retailers can offer a discount for cash & check purchases Against MasterCard’s Regulations for Vendor to Bill Cards Prior to Shipping Courtesy Discount for PCards at Bookstore To Obtain Discount, Must Identify Yourself as PCardholder – Can’t Send Student to Bookstore w/ Your Card

39. New Cardholders New Cardholders should visit the Purchasing Card website, hawaii.edu/oprpm/pcard/ for: PCard Program information PCard Application & Agreements Eligibility Guidelines Must be UH Employee Students, Casual Hires & RCUH Employees Not Eligible Must Attend PCard Training Must Complete & Submit Application & Cardholder Agreement Must Obtain Access to KFS

40. Purchasing Card Website www.hawaii.edu/oprpm/pcard/ How to Apply for a PCard Training Schedule Usage Guidelines Lost, Stolen or Compromised Cards How to Dispute a Transaction CentreSuite User Guides Exceptions to “Pcard is Preferred Method of Small Dollar Purchases” Policy How to Cancel a PCard Cardholder FAQs

41. Purchasing Card is a Privilege As De Facto Purchasing Agent for UH, Cardholder Must Have Understanding of UH Policies & Procedures New PCDO Process Greatly Reduces the Amount of Paperwork Associated w/ PCard, Allowing Cardholder to Focus on Purchasing Responsibly & Ethically Cardholder is Accountable for All Purchases Made w/ PCard

42. PCDO eDocs PCDO is Reconciliation Tool for PCard Transactions PCDO eDocs are Routed to Four Approvers 1. Cardholder 2. Reallocator 2. Approving Authority (Account Supervisor) 3. Fiscal Administrator Some Roles May be Assigned to the Same Person At Least Two Different Individuals Must Review & Approve PCDO eDocs to Ensure Proper Separation of Duties

43. Revisions to PCard Program Roles & Responsibilities – PCDO Cardholder 1 st Approver in PCDO process Promptly reviews & takes action on PCDO Scans & attaches receipts & documentation to PCDO eDoc in orderly manner Certifies goods/services received in good order & consistent w/ what was ordered When purchases are reallocated to extramural accounts, all goods/services should be received before PCDO eDoc is approved by FA

44. Revisions to PCard Program Roles & Responsibilities – PCDO Reallocator Reallocates PCard transactions to correct account & object code Verifies that appropriate documentation received Approving Authority (Account Supervisor) Certifies that purchase supports program objectives Ensures purchase allowable under terms of sponsored program account

45. Revisions to PCard Program Roles & Responsibilities – PCDO Fiscal Administrator Provides fiscal, policy & internal control management of its PCard Program, ensuring validity of PCard transactions Reviews transactions for compliance Certifies availability of funds Ensures proper accounting of charges Verifies receipt of goods/services Provides final approval in PCDO process

46. Revisions to PCard Program Roles & Responsibilities – PCDO Department Coordinator Liaison between Dept & Purchasing Card Admin. Approving Official Sets Card Limits Approves PCard Applications Provides Key Point of Control to Maintain Appropriate Spending Activities

47. Revisions to PCard Program Roles & Responsibilities - PCDO Reconciler Ensures reliability of & maintains PCard financial records Reconciles bank statement to PCDO report on monthly basis Corrects Errors Ensures Goods & Services Received & PCDO eDocs Fully Approved Files & Retains PCDO Records in Accordance w/ E2.216 Electronic version of original paper document, once scanned, recognized by UH as official record. Original paper documents shall be retained for one year after scan date.

52. PCard Program Contacts Joyce Teraoka – ph. 956-7977, teraoka@hawaii.eduteraoka@hawaii.edu Cindy Flynn – ph. 956-5405, cflynn@hawaii.educflynn@hawaii.edu Matthew Chow – ph. 956-2765, chowmatt@hawaii.educhowmatt@hawaii.edu Contact Matthew for PVSNet logon problems & CentreSuite access