(20)AR 021908 Procurement Card Program

Browse Search

P -Card programs are tailored to specific Agency needs to ensure consistency with organization policies and objectives. The P -Card Manual, forms, and training program were developed based on training simulations and best practices from other agencies. During the pilot program, participating cardholders worked closely with Purchasing to fine tune the forms and procedures to facilitate the reconciliation process. Through US Bank, the P -Card program utilizes Merchant Category Codes (MCC) to prevent fraudulent transactions before they occur. Purchasing took the conservative route and blocked all MCC's requiring Participating Cardholders and their Approving Officials to justify the need on an individual basis. The need was then weighed against the exposure to risk and restrictions were lifted when appropriate. MCC's will need to be monitored continually and adjusted as shifts in job duties and responsibilities evolve. In addition, some Vendors have been assigned inappropriate MMCs by their banking institution causing further frustration. In reviewing the October statement, Purchasing identified charges that were inconsistent with the City's Travel Policy. The transactions were brought to the Finance Director's attention and staff was required to reimburse the city as a result. US Bank's Fraud Department notified staff on Monday, January 7, 2008 of suspected fraudulent charges made on Friday, January 4, 2008. Staff confirmed that the charges were fraudulent and US Bank immediately canceled the card and issued a new one. All charges were h reversed. Cardholder statements are mailed and emailed to Cardholders between the 22nd and 24� of each month. Staff was notified of the fraudulent charges and the discrepancy resolved nearly 3 weeks prior to the statement date. The CAL Card Pilot Program received its first quarterly rebate check from US Bank in the amount of $425.09. The check represents the combined incentive earned by the City and is based on the calculation of the following incentive programs: 1) *Average Transaction Incentive = Total Sales/# of Transactions x 0.75 Not greater than 2% of volume for the quarter 2) Volume Sales Incentive = Total sales x 0.00393 3) Prompt Payment Incentive = 45 days - # of Days to pay/45 days x 0.0045 x invoice amount If expansion of the P -Card program is approved, Purchasing will accept requests for New P - Cards within the following guidelines: • Department illustrates that a need exists • Number of cards will be restricted to 2 — 3 cards per department • New cards will be issued in phases to allow for sufficient training (5 per phase) • Departments who did not participate in the Pilot Program will be included in the first phase. TREASURERS AUDIT, The primary objective of the audit was to assess the adequacy of the controls over the use of the P - cards and to determine departmental compliance with the P -Card policies and procedures. The audit was limited to internal controls and processes over Purchasing's administration of the Pilot