Vanderbilt University has established a Procurement Card Program to provide expanded convenience and controls for low dollar purchases, and to establish a payment methodology that will support the future purchasing directions of internal and external transactions. The Procurement Card, an institutional credit card, is designed to give controlled buying power directly to the Departments/Divisions eliminating many purchase orders, check enclosed orders and University and Medical Demand checks.

J.P. Morgan Chase & Co. is the provider of the Vanderbilt University MasterCard Procurement Card. Mastercard is readily accepted by most vendors and is a convenient purchase and payment tool for low dollar purchases.

11.1 HOW IT WORKS Effective Date: February 1, 2007

1. Cardholder makes an authorized business-related purchase by charging it on their J. P. Morgan Chase Mastercard.
2. Cardholder logs the transaction on the MasterCard Transaction Control Log and attaches receipt and supporting documentation.
3. Cardholders review their transactions daily/weekly in the PaymentNet Internet application.
4. The Card Manager approves the Cardholders transactions in the PaymentNet Internet application for distribution to the appropriate general ledger account and center number for all charges within the current billing cycle. The Card Manager reviews the supporting documentation, signs and dates the MasterCard Control Log or bank statements if required by section 11.10 on a monthly basis.
5. Cardholder reconciles receipts and MasterCard Transaction Control log to the Commercial Card Statement from J.P. Morgan Chase.
6. J.P. Morgan Chase pays the merchant when the vendor submits the transaction for payment.
7. Vanderbilt University pays J.P. Morgan Chase once each billing cycle.
8. Cardholders maintain proper receipts and supporting documentation, transaction log, and Commercial Card Statements, within the department.

11.2 DEFINITIONS Effective Date: February 15, 2006

Procurement Card: A card issued to an employee of Vanderbilt University for the purpose of making authorized business-related purchases on behalf of the University. The University will issue payment for charges made with the Procurement Card.

Cardholder: The Vanderbilt University employee whose name appears on the Procurement Card and is accountable for all charges made with that card.

Card Manager: The Vanderbilt University employee within each Department/Division responsible for approving a Cardholder's transactions for payment in the PaymentNet system. Card Managers have the ability to reallocate individual charges to multiple general ledger account and center numbers. A Card Manager may oversee more than one Cardholder account, depending on how the Department elects to manage its accounts. The Card Manager is also responsible for verifying that all charges against the Cardholder's account for that Department are backed up by the appropriate supporting documentation and that the documentation is retained within the Department according to the Office of Financial Affairs' Document Filing and Record Retention Policy.

PCard Approvers (Card Managers) should be in a position of authority relative to the Cardholder or not directly supervised by the Cardholder.

Procurement Card Program Manager: The Vanderbilt University employee from the Procurement Card Office is responsible for administering the Procurement Card Program for the University and acting as the main contact between Vanderbilt and J.P. Morgan Chase.

PaymentNet: An Internet-based financial reporting system owned by J.P. Morgan Chase. The system is a secure web site, which is derived and maintained by J.P. Morgan Chase, using the company's internal servers. Access to PaymentNet requires a secure password for the Cardholder and Card Manager in order to review, change and approve Procurement Card transactions.

Transaction Limit: A dollar limitation of purchasing authority assigned to the Cardholder for each total charge made with the Procurement Card. The maximum amount cannot exceed the Cardholder's limit. The Dean/Administrative Officer will establish the limit set for the individual Cardholders within the Department in accordance with the Procurement Card program guidelines. A single transaction amount may include multiple items but cannot exceed a Cardholder's limit.

Monthly Spending Limit: A dollar limitation of purchasing authority assigned to the Cardholder for the total of all charges made during the monthly billing cycle. The Dean/Administrative Officer will establish the limit set for the individual Cardholder in accordance with the Procurement Card program guidelines.

Default Account and Center Number: The Vanderbilt University general ledger account and center number assigned to an individual Cardholder's Procurement Card. Each Procurement Card will have a primary default account and center number assigned to it. Note: Sponsored Projects may not be used as a primary default center number. All charges made with the Procurement Card will be posted to the default account and center number if the charges are not reallocated in the PaymentNet system by the monthly billing cycle cutoff.

Support Documentation: A merchant produced or non-University document that records the relevant details for each item purchased including quantities, dollar amounts, a description of what was purchased, the total charge amount, the merchant's name and address (i.e. sales receipt, original invoice, credit receipt, e-mail from the merchant, etc.)

MasterCard Transaction Control Log: A Log (document/record) that identifies all card activity (charges/returns, etc.). A transaction log must be maintained by each Cardholder and will be used to reconcile receipts to the Commercial Card Statement. Refer to the Procurement Card Procedures Manual for the suggested format. Use of the Transaction Control Log is a mandatory component of Vanderbilt's Procurement Card Program.

Commercial Card Statement: A report available from J.P. Morgan Chase through PaymentNet detailing transaction activity for an individual card account number for purchases made during the monthly billing cycle. Cardholders must print bank statements monthly and retain with documentation.

Procurement Card Application Form: The Form to be completed by prospective Cardholders to obtain a Procurement Card.

Cardholder User Agreement: An Agreement Form, signed by the Cardholder and the Card Manager, which verifies that the Cardholder has read and understands the guidelines set forth in the Procurement Card Program Policies and Procedures and agrees to comply with them.

11.3 RECEIVING THE PROCUREMENT CARD Effective Date: February 15, 2006

An employee with delegated signature authority or any employee with delegated purchasing authority by a Dean/Administrative Officer can obtain a Procurement Card.

A completed Procurement Card Application Form must be submitted for each prospective Cardholder. This form must be signed by the Dean/Administrative Officer for the default account and center numbers shown on the application, and forwarded to the Procurement Card Program Administrator.

All prospective Cardholders and Card Managers are required to attend a training session, and sign a Cardholder User Agreement and Conflict of Interest Statement, to be eligible to receive a Procurement Card.

11.4 GUIDELINES Effective Date: February 15, 2006

Each Cardholder is responsible and accountable for the Procurement Card issued in their name.

All Procurement Card transactions must be reviewed by the Cardholder and then approved by the Card Manager in PaymentNet by the last business day of the current month. Non-compliance can result in suspension or cancellation of the procurement card.

Vanderbilt University is a tax-exempt organization. The Tennessee sales tax-exempt number is printed on the front of every Procurement Card. Cardholders must give this number to all vendors at the time of any transaction to exempt payment for Tennessee or reciprocal state sales tax.

The Card Manager is responsible for ensuring that departmental funds are available in the account/center(s) for Procurement Card purchases, including the default account/center number. The Card Manager is also responsible for verifying that all charges against the Cardholder's account for that Department are supported by the appropriate transaction documentation. All Procurement Card records (invoices, receipts, transaction control logs, statements, etc.) are to be retained in the department files in accordance with the University's document filing and record retention policies associated with terminated or transferred cardholders. Special efforts may be required to properly retain transaction documentation.

Procurement Card transactions for a single item may not be split to divide a larger purchase which is over the Cardholder's pre-established transaction limit.

11.5 AUTHORIZED CARD USE Effective Date: February 15, 2006

The University has authorized J.P. Morgan Chase to encode the card so that it will not be accepted for certain types of goods or services by blocking the Merchandise Category Codes (MCC) for unauthorized purchases.

The Procurement Card may not be used for the following purchases:*

· Any single purchase exceeding the Cardholder's pre-established transaction dollar limit (including freight and handling)
· Capital Purchases
· Personal use
· Controlled substances and prescription drugs
· Laboratory animals and animal related purchases
· Radioactive and hazardous materials
· Patient Care products and equipment (Medical Supplies)
· Cash advances (ATMs)
· Contract services (including consulting services and professional services)
· Cash refunds for returned card purchases
· Products and Services specifically excluded by the funding agencies, when applicable.

*Additional items may be added to this exclusion list at the discretion of your individual department.

Common uses of the Procurement Card may include, but are not limited to:

· Books & Journal Subscriptions
· Business Meal Expenses
· Printing & Copying charges
· Beeper & Cell Phone Service
· Office and Lab supplies
· Coffee & Water Service
· Repairs
· Catering Expenses
· Small dollar retail purchases
· Flowers
· Stamps & postal charges
· Conference Expenses
· Dues & Memberships
· Federal Express Charges
· Travel (with approval)
· Campus Bookstore Charges
· Other items traditionally purchased on Small Purchase Orders

When purchasing furniture using the Procurement Card, the only approved suppliers are: Interior Design Services, Nashville Office Interiors, and The Autumn Group. These contracted suppliers meet Vanderbilt’s requirements to insure that any furniture in a work, study or sleep area meet fire-retardant code standards.

Only the Cardholder whose name is embossed on the Procurement Card is authorized to use the card. It is against policy for you to give your card to someone else. The Cardholder is responsible for ensuring all charges made with the card are in compliance with the Procurement Card Program Policies.

Procurement Services has two online tools to assist departments in identifying both the optimum method and vendor for orders.

This Preferred Purchasing Methods is a user guide to selecting the most preferred method for purchasing products and services. The preferred methods are generally more efficient for both user and the support organizations to process in compliance with University policies. In the cases where several methods are listed for a particular product or service, the most preferred process is on the left of the matrix. In general, eProcurement is the most efficient and recommended method of purchasing.

Click here to view the matrix.

For many of the most commonly used products and services, Vanderbilt Procurement Services has negotiated contracts with a select group of suppliers. Many of these suppliers were awarded contracts on the basis of their competitiveness and ability to serve the needs of the entire Vanderbilt community. Our contracts have deep discounts and special terms and conditions not generally available from non-contract or non-approved suppliers. In many cases, our contract suppliers have sales and customer service personnel assigned exclusively to serving Vanderbilt.

Our Approved Supplier Directory is arranged by Product/Service description and lists the approved suppliers for each commodity. Included in this directory are internal Vanderbilt service providers as well as alternative external suppliers. Links to contact email and supplier web pages are included. The Directory can be sorted by Product/Service Description, Supplier or Contact. A full profile on each supplier is provided by clicking on the specific Product/Service description. Should you have any questions about any particular commodity or supplier, the assigned Vanderbilt Purchasing Agent is listed in the profile for your convenience.

Click here to view the directory.

11.6 POTENTIAL TAX LIABILITY Effective Date: February 15, 2006

The Internal Revenue Service (IRS) considers employer gifts of cash, gift cards, gift certificates, and similar items which can easily be exchanged for cash as additional taxable salary or wages which is subject to reporting and withholding obligations by the employer. (Publication 525 Taxable and Non Taxable Income)

Report ALL gift card / gift certificate purchases to Dan Cline in Human Resources via e-mail and include ALL of the following information for each recipient:

Employee ID

Employee Last Name

Employee First Name

Amount of the Gift Card/Gift Certificate

In the event you have multiple gifts to report, you may create an Excel file and attach it to your e-mail.

You can address any questions to Dan Cline at 3-6606 or dan.cline@vanderbilt.edu

11.7 UNAUTHORIZED AND/OR INAPPROPRIATE Effective Date: April 3, 2000
CARD USE

The Procurement Card must never be used to purchase items for personal use or for non-University purposes even if the Cardholder intends to reimburse the University.

A Cardholder who makes an unauthorized purchase with a Procurement Card, as defined in Section 11.5, or uses the Procurement Card in an inappropriate manner, may be subject to disciplinary action including card cancellation and Performance Improvement Counseling up to and including discharge. When appropriate, notification of fraudulent use will be shared with both the campus Police and with the Metropolitan Police Department for possible criminal prosecution. (Refer to HR Policy #14 Performance Improvement Counseling and HR Policy #15 Discharge.) Managers are encouraged to contact the office of Employee Relations at 322-7259 to coordinate appropriate disciplinary actions.

11.8 RECEIPT OF MATERIALS AND SERVICES Effective Date: April 3, 2000

The Cardholder is responsible for ensuring receipt of materials and services and to follow up with vendors to resolve any delivery problems, discrepancies and/or damaged goods.

If materials are ordered by phone, the Cardholder is responsible for advising the vendor to include a sales receipt in the package, as it will be used for supporting documentation. To ensure proper delivery of merchandise, the Cardholder must inform the vendor to include the following information on the outside packing label:

· Cardholder Name
· Campus/Medical Center Mailing Address (including building name and room number)
· Phone Number

11.9 RETURNS, CREDITS & DISPUTED CHARGES Effective Date: February 1, 2003

It is the responsibility of the Cardholder to contact the vendor when merchandise purchased with the Procurement Card is not acceptable (incorrect, damaged, defective, etc.) and arranges a return for credit or exchange.

If merchandise is returned for credit, the Cardholder is responsible for obtaining a credit receipt from the vendor and retaining that receipt with the support documentation for that purchase. Receiving cash or checks to resolve a credit or return is prohibited. If a supplier accepts an item as a return, a credit for this item should appear on the following month's Commercial Card Statement. All credits should be indicated on the MasterCard Transaction Control Log.

Disputed Charges: If a Cardholder cannot resolve a disputed item directly with the vendor, the Cardholder should mark the transaction as disputed in the PaymentNet system. All disputed charges must be marked disputed in PaymentNet within 60 days of the post date in which it occurred. Disputed transactions should be marked reviewed and approved.

11.10 MASTERCARD TRANSACTION Effective Date: February 1, 2007
CONTROL LOG

For all Cardholders that anticipate incurring more than 120 PCARD transactions per fiscal year, 10 per month or more, it is mandatory that the Cardholder maintain a MasterCard Transaction Control Log listing all purchases. For those Cardholders with annual PCARD transaction volumes of 120 or less per fiscal year, use of the MasterCard Transaction Control Log may be waived at the discretion of the Cardholder's Card Manager or appropriate departmental fiscal administrator. Each Cardholder is responsible for requesting a waiver from the transaction log process on an annual basis. Reviewing/verifying the validity of these transaction log waivers will become a part of your department's periodic PCARD Audit. The Cardholder must retain the original charge slip, sales receipt, packing slip, invoice, or any other information related to the purchase and attach it to the MasterCard Transaction Control Log. It is the Cardholder's responsibility to ensure that there is a receipt for every PCARD purchase.

Card Managers must review the Cardholder's supporting documentation, and sign and date the MasterCard Transaction Control Log on a monthly basis to signify their review and approval of the transactions in PaymentNet. If a waiver from the Transaction Control Log process has been granted, then the Card Manager is required to sign and date the Electronic Bank Statement each month. Future reviews of Cardholder transactions will include an audit of the transaction logs or bank statements to confirm the signature and date review process has been followed.

11.11 RECORDS RETENTION Effective Date: February 15, 2006

It is the Cardholder's responsibility for obtaining purchase documentation from the vendor (sales receipts, packing slip, etc.) to support all purchases made with the Procurement Card. Departments/divisions must comply with the record retention requirements for support documentation as set forth in Vanderbilt's policy, "Departmental Record Retention Guidelines for Financial Documents."

All Departments/Divisions will maintain records of each procurement card transaction and the supporting documentation in an auditable state for eight years for expenses excluding federal grants or awards. The length of this retention period is attributable to the fact that departments/divisions are the sole source of support, meaning they hold the only copy on campus. All records pertinent to a federal grant or award must be retained until three years after the date of submission of the final expenditure report in compliance with granting authority regulations. Procurement Card transaction documentation and monthly reconciliation's will be subject to audit by the Procurement Card Office or Internal Audit.

Documentation must support the propriety of the transaction and contain the following information:

· Vendor name
· Detail listing of goods purchased, including item description, quantity and price
· Transaction date & Total dollar amount of purchase

Examples of acceptable supporting documentation includes, but are not limited to:

· Original sales receipt, invoice, cash register receipt, or packing slip (including the price)
· Internet confirmation printed from email (if there is no packing slip with the goods when received)
· Original copy of order form or application

Business meal transactions must include names of attendees and business purpose in the documentation to comply with Internal Revenue Service (IRS) regulations. If there are a large number of attendees, listing the type of group is acceptable.

NOTE: In most cases, a reimbursable meal event occurs when two or more individuals are dining together; where the main purpose of the meeting is to exchange information pertinent to the business interests of the University; and time, circumstance or convenience make meeting around a meal advantageous. In this circumstance, the meal receipt, the attendees and topic discussed, are required for your review as to the appropriateness of the expense and your submission for reimbursement.

However, the test for business meal reimbursement for a single individual, excluding business trips away from the Nashville area, is more complicated. In this circumstance, to qualify for business reimbursement, the meal must be provided for the convenience of the employer as a result of (1) the scarcity of food outlets in and around the work location and the time critical nature of the work of the employee, and (2) the meal must be furnished on the employer's business premises. Except for these defined parameters, the amount of the employer-provided meal expense and/or reimbursement to the individual becomes a taxable benefit to the employee and should be added to the employee's compensation through IRS Form W-2. Even occasional individual meals qualify under the IRS regulations noted below and should be considered a taxable benefit to the employee.* These taxable benefits should be reported to payroll using the Taxable Fringe Reporting Form found on the HR website at hr.vanderbilt.edu/forms/index.htm.

* Reference IRC 119; Treasury Regulations 1.119-1(a) and (b)
                        IRC 132; Treasury Regulations 1.132-6 (d) (2).

11.12 VERIFICATION OF CHARGES/ Effective Date: February 15, 2006
RECONCILIATION & REVIEWS

Procurement Card transactions are available for review/reallocation and approval in the PaymentNet Internet application within 24-48 hours after receipt of transaction by J.P. Morgan Chase.

The standard monthly billing cycle cutoff is at midnight on the 25th of every month. If the 25th falls on a Saturday, cutoff would be midnight on the 24th, if it falls on a Sunday, the cutoff would be midnight on the 26th.

Cardholders and Card Managers must approve the distribution of the transactions by the last business day of the month. Transactions not reviewed or approved will be charged to the default account/center of the Cardholder.

Card Managers and Cardholders will be notified via email every Monday of transactions that have not been approved in PaymentNet.

One business day after the billing cycle cutoff, Cardholders will print their monthly statements electronically from PaymentNet and reconcile all charges against their MasterCard Transaction Control Log and receipts. Cardholders should file the Receipts, the Control Log, and Monthly Statement in the department.

Four business days after the billing cycle cutoff, the Procurement Card Program Administrator exports the transaction file from J.P. Morgan Chase. Reallocation of account/center numbers cannot be made after the file has been exported. PaymentNet transactions will be in inquiry mode only.

Failure to Approve Transactions Effective Date: February 15, 2006
Card Managers who have unapproved transactions at the end of the month, for three consecutive months in any six month period, will have their PCARD privileges suspended or revoked.

Approval of Disputed Transactions Effective Date: February 1, 2003
PCARD transactions in dispute must be marked reviewed and approved. The vendor has already been paid, and JP Morgan will process the dispute. Any awarded credits will be applied to the Cardholder's account once the dispute has been successfully processed. That credit will eventually offset any incorrect charges on the account. Cardholders should assign the same account and budget center number to the credit, as was assigned to the initial charge.

General ledger description on the monthly accounting reports will include:

· Account/center number information
· Vendor name
· Amount of purchase
· Transaction date
· Cardholder first and last name

Daily PCARD Transaction Reviews Effective Date: July 18, 2002
The Procurement Card Office will review PCARD transactions on a daily basis for unusual activity. Our staff may contact Cardholders directly to request a faxed receipt or invoice for review. To keep these requests to a minimum, Cardholders are asked to document the business purpose in the transaction notes section in PaymentNet, and to avoid make split transactions for single items. Administrative Officers or Directors may request temporary limit increases for purchases above the single purchase limit.

Department PCARD Audits
The Procurement Card Office will continue to perform department PCARD audits on a regular basis. Departments will be notified in advance of a PCARD audit. Cardholders, who have an unsatisfactory audit, will be given written suggestions of improvement. Those Cardholders will be audited again during the current year. If improvements have not been made, and/or policies and procedures are not followed, the Cardholder or Card Manager will lose their PCARD privileges. Items of concern include missing receipts, questionable charges, missing cardholders logs, missing travel authorization numbers, unreviewed transactions,unapproved transactions, and lack of proper documentation.

The Office of Internal Audit may contact departments for independent PCARD audits. The Federal Government may also audit Vanderbilt departments at any time.

Appropriate PCARD Approval Structure
The Procurement Card office may review department Cardholder and Card Manager approval structures. Departments may be asked to provide information regarding their organizational structure for documentation of these existing relationships. Changes may be recommended and/or required. Departments will be given proper notification and assistance if changes are required.

11.13 REPORTING A LOST/STOLEN CARD Effective Date: February 1, 2003

If a Procurement Card is lost, stolen or damaged, the Cardholder must immediately contact J.P. Morgan Chase at 1-800-270-7760. It is imperative that the Cardholder contacts the bank immediately for suspension of the Procurement Card, as the Cardholder is responsible for all charges made on the card until it has been cancelled at the bank. Cardholder must also notify the Procurement Card Program Administrator after reporting the incident to the bank. The Cardholder's card will be cancelled, and J.P. Morgan Chase will issue a new Procurement Card. A Procurement Card that is found after it has been reported lost or stolen must be destroyed by cutting it up several times and then discarded. The same procedure applies if the card is damaged.

11.14 CARDHOLDER ACCOUNT MAINTENANCE Effective Date: February 1, 2003

An email from the Dean, Administrative Officer, or Director is required for any Cardholder Account changes such as limit increases, addition of travel capabilities, budget center changes, or any other changes not reflected on the original PCARD application. This email should be sent to pcard@list.vanderbilt.edu.

11.15 CARD EXPIRATION Effective Date: February 15,2006

All PCARDS will have an expiration date of 3 years from the original issued date. JP Morgan Chase will automatically reissue new PCARDS each month for all active cardholders, whose card will be expiring that month. The account number will remain the same, but the expiration date and security code on the back of the card will change. The replacement PCARDS will be sent to the Procurement Card Office and the cardholder will be notified via e-mail. The replacement card will have to be picked up from our office because it can not be sent campus mail.

The PCARD is good through the end of the month that they expire.

11.16 CANCELLATION OF CARDS Effective Date: February 15, 2006

Procurement Cards can be cancelled at any time. In the event that it is necessary to cancel a card, the Card Manager will retrieve the PCARD and PCARD documentation from the cardholder. The documentation must be retained for use with the next audit. The Supervisor/Manager must contact the Procurement Card Office via email to have the account closed as soon as possible. The PCARD should then be cut up several times and discarded.

Reasons for cancellation include:
· Cardholder is no longer employed at the University
· Cardholder is transferring to another department within the University
· Cardholder goes on leave without pay
· Cardholder is requested to surrender card due to violations of policies

11.17 CARD TERMINATION Effective Date: February 15, 2006

If it is found that a Cardholder has not used the Procurement Card for six (6) consecutive months or more, the card may be revoked at the discretion of the Procurement Card Program Administrator with the Dean/Administrative Officer approval. The Procurement Card Program Administrator will solicit from the Cardholder any reasonable explanation for non-use of this privilege.

When a Cardholder terminates employment, the Card Manager will need to notify the PCard Department via e-mail to cancel the card. The Card Manager will retrieve the PCARD and PCARD documentation from the cardholder. The documentation must be retained for use with the next audit. Failure to do so may result in revocation of all Procurement Card privileges. If a terminated employee continues to use this card, the Department will be liable for all charges. The terminated employee may also be subject to criminal prosecution.

If the Office of Financial Affairs or the Department of Finance has to contact a single department on multiple occasions because of insufficient funds within the departmental budget, that department's cards may be revoked entirely.

If the Procurement Card Program Office has to contact a Card Manager because of unapproved transactions at month-end for three months in a six month period, the Card Manager's right may be suspended or revoked.

Non-adherence to these procedures will result in termination of individual Cardholder privileges and may result in the loss of the entire department's privileges to use the Procurement Card.

11.18 CONTROL & PROGRAM COMPLIANCE Effective Date: February 15, 2006

Consistent adherence to the Procurement Card Program controls and rules is required of all Cardholders and Card Managers to assure continued eligibility to participate in the program. Failure to properly adhere to these controls and rules will result in the following actions: