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Settlement System

Purchasing Card Manual for Individual Cardholders Help Desk 617-496-CARD(2273) pcard@harvard.edu

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Introduction        top of manual          PCard homepage

Welcome to the Harvard University Purchasing Card Program. The Purchasing Card offers an alternative to the existing Harvard procurement processes and provides an extremely efficient method of purchasing and paying for goods costing less than $2,500. The Purchasing Card Program will enable you to conveniently purchase commodities directly from any vendor that accepts MasterCard.

This program, which was created with the help of many staff and faculty members, is designed to meet your needs and those of the University. Please read this manual carefully for a clear understanding of the Purchasing Card Program, then sign the Cardholder Agreement (included on the PCard Application form). Use of the Purchasing Card will not affect your personal credit history.

The benefits of the Purchasing Card are significant:

Benefits to the Cardholder

• Eliminates the need to use personal funds and obtain reimbursements;
• Provides convenience, security and flexibility.
• Allows you to obtain goods faster.

Benefits to Harvard

• Reduces the number of invoices, checks and purchase orders.
• Enables Administration to focus on value-added activities.
• Capitalizes on the worldwide acceptance of MasterCard.

As with any financial instrument, you should be aware of Harvard's policies and restrictions prior to obtaining and using the card. The Purchasing Card is to be used only for purchases related to Harvard business. Use of the card for personal purchases is strictly prohibited and subject to disciplinary actions.

Corporate Liability        top of manual          PCard homepage

The Harvard Purchasing Card is a MasterCard with corporate liability. Corporate liability is defined as follows:

Local units are not liable for charges made with a Purchasing Card resulting from card theft or other fraudulent use by third parties not employed by the University.

Local units are not liable for charges made by a terminated employee, once notice of termination is provided to GE Capital.

Local units are liable for all charges made by University employees.

Purchasing Card Program Overview        top of manual          PCard homepage

Procurement Management is responsible for administering the Purchasing Card Program. GE Capital Financial Inc. provides program services to Harvard. If you have any questions regarding the program, or the appropriate use of the Purchasing card, please contact the Purchasing Card Administrator in your tub or local unit. You may also contact the PCard Help Desk at 496-CARD, or e-mail: pcard@harvard.edu.

• Each tub or local unit has a designated Purchasing Card Administrator who is responsible for the coordination and administration of the local Purchasing Card Program.
• Purchasing Card Administrators can delegate this authority to designated individuals, who will act as "reviewers" within their local unit. A reviewer is responsible for the coordination and administration of a designated group of Purchasing Card holders within their local unit. A reviewer must make sure that all transactions for which they are responsible are reviewed in the settlement system prior to being swept to the general ledger. Reviewers must also maintain PCard receipts for these transactions. A Missing Receipt Affidavit must be completed for all missing receipts over $75. All receipts must be kept on file locally in accordance with Harvard's record-retention policy (usually for four years), set forth in the Harvard University General Records Schedule, available on-line at http://hul.harvard.edu/rmo . See reviewing procedure under "Reviewer Responsibility," below.
• The "PCard Program Administrator," a member of Procurement Management, is responsible for coordination and administration of the Harvard Purchasing Card Program.

How It Works        top of manual          PCard homepage

The Purchasing Card simplifies both the procurement and disbursement processes. When you make a purchase, in person, by phone or over the Internet, the vendor requests a purchase authorization at the point of sale. Then the MasterCard system validates the transaction against pre-set limits established by Harvard. Transactions are instantaneously approved or declined based on the following Purchasing Card authorization criteria:

• Number of transactions allowed per month and per day;
• Single-purchase limit, including shipping costs, not to exceed your limit;
• Monthly spending limit;
• Approved commodity type (for example, office supplies are allowed while travel expenses are not allowed).

MasterCard pays the vendor and bills GE Capital, the University service provider, who sends these transactions to Harvard. These transactions are loaded into a database that you can view from your web browser.

Acquiring a Purchasing Card        top of manual          PCard homepage

Harvard employees, and graduate students who routinely purchase for the University, can be designated by the local Purchasing Card Administrator to receive a Purchasing Card. At the discretion of the Dean, selected undergraduate students (e.g., Treasurers of Student Associations / Clubs) may be issued Purchasing Cards. For details regarding system access go to the “Documents” page of the Financial Administration website at http://vpf-web.harvard.edu/documents/ and click on “Access to Harvard’s Financial Systems.”

The cardholder is required to read the Purchasing Card Manual and adhere to all Purchasing Card policies and procedures. Individuals must complete the application form, attend a formal Purchasing Card Training Session, and sign a Cardholder Agreement Form before they can receive their card. The standard application process time is less than three weeks from the submission of applicant data to Holyoke Center, to the receipt of the card.

All newly issued Purchasing Cards will be mailed directly from GE Capital to the PCard Program Administrator in Procurement Management, for establishment in the PCard Settlement System. Cards will then be forwarded to the local Purchasing Card Administrators for distribution to the cardholders.

Activating Your Purchasing Card        top of manual          PCard homepage

Cardholders need to activate their Purchasing Cards prior to using them. To activate a Purchasing Card call GE Capital at 1-800-274-7378. A Voice Response Unit will take cardholders through the activation process.

When activating new cards or accessing information through the Voice Response Unit, Harvard employees will be asked to enter their Purchasing Card account number and employee number (or Harvard ID number). If this information is mis-keyed or the cardholder requests to speak with a customer service associate, the cardholder's Harvard ID number will be requested by the Customer Service Representative. In all cases, cardholders should provide only the first eight digits of their Harvard ID number, as the digits appear on the Harvard ID card.

Misuse of the Purchasing Card         top of manual          PCard homepage

The Purchasing Card represents Harvard's trust in you as a responsible employee who will safeguard and protect University assets. As a cardholder, you assume the responsibility for the protection and proper use of the Purchasing Card.

The Purchasing Card can only be used by the individual whose name appears on the card. Purchasing Cards and card numbers must be safeguarded against use by unauthorized individuals within or outside the University.

The following situations are examples of misuse of the Purchasing Card:

Personal misuse:

• Purchases for the sole benefit of the employee
• Assignment or transfer of an individual card to an another person
• Use of a Purchasing Card by a suspended or terminated employee

Administrative misuse:

• Lack of proper and timely reconciliation of individual cardholder account
• Splitting an order to avoid the single-purchase limit
• Use of the Purchasing Card for commodities restricted by policy

Purchasing Card Administrators and Reviewers have the responsibility to suspend or terminate Purchasing Card privileges in instances of misuse. Improper use of the Purchasing Card may also result in disciplinary action, up to and including termination of employment.

Restricted Commodities        top of manual          PCard homepage

You should not use your PCard whenever your individual purchases exceed your PCard spending limits, or to make any personal purchases. The PCard, like all Harvard University financial tools, is to be used in accordance with the University-wide Business Expense Policy (UBEP). This can be found at http://vpf-web.harvard.edu/documents/.

Appendix A of the UBEP includes the most common personal and unallowable expenses requested for reimbursement or payment submitted to the University Travel and Reimbursement Office. These are prohibited on the PCard. If a cardholder inadvertently purchases a commodity from Appendix A they must reimburse the University for that cost.

Appendix B of the UBEP includes the most common personal and unallowable expenses requested for reimbursement or payment submitted to the University Travel and Reimbursement Office that may be acceptable if they meet exception criteria, as outlined in Appendix B, and if an approval letter from a Financial Dean is obtained. These may be permitted on the PCard. In these cases the approval documentation must be kept locally with other PCard documentation, and available in the event of an audit.

In addition to the personal and unallowable expenses set forth in the UBEP, the PCard is not to be used to purchase any commodities from the list below, even if they are Harvard University business related. There are compliance issues relating to many of these items that require either pre-audit or pre-authorization.

The Purchasing Card is not to be used for:

• travel and entertainment purchases, such as:
  • airline tickets
  • travel agencies
  • hotels
  • car rentals
  • restaurants outside the Boston/Cambridge vicinity
  • automotive gasoline
  • tolls
  • theaters
  • clubs
  • railroad tickets
  • bus tickets
  • cruise ships
  • cash advances
  • travelers checks
• gifts
  • any gift over $75
  • all gift certificates
• animals and animal-related purchases
• services of non-incorporated providers
  • Catering (non-incorporated)
  • Consulting (non-incorporated)
  • Repairs (non-incorporated)
  • Maintenance (non-incorporated)
• internal service providers (i.e., any vendor using Harvard's 33-digit chart of accounts)
• prescription drugs and controlled substances
• hazardous materials

In the event that a PCard is used to purchase a commodity from the list above, the cardholder’s Purchasing Card Administrator should notify the cardholder’s Financial Dean of the infraction. A copy of this notification should be kept on file locally with other PCard documentation, and available in the event of an audit.

If you have any questions regarding these restrictions, or the appropriate use of the Purchasing Card, please contact the Purchasing Card Administrator or Reviewer in your tub or local unit, or the PCard Help Desk at 496-CARD (e-mail: pcard@harvard.edu). For a listing of which Harvard financial tool to use in a specific situation—including when and when not to use the PCard—go to the “Documents” page of the Financial Administration website at http://vpf-web.harvard.edu/documents/ and click on “Summary Overview: Procurement and Reimbursement Systems.”

Sales Tax Exemption         top of manual          PCard homepage

When purchasing goods, inform the vendor that Harvard University is exempt from Massachusetts State Sales Tax. Harvard's tax exempt number is E 042-103-580 and is preprinted on the front of your Harvard Purchasing Card. This number should be given to all vendors by the cardholder at the time of purchase.

A vendor doing business with the University for the first time may request a copy of the University's Massachusetts tax exempt certificate. A copy of the Massachusetts tax exempt certificate, which is included in the appendix, can be duplicated as needed.

Local units purchasing goods from other states for use in that state should access the Procurement Management web page to download the University's tax exempt form for that state. Current ST-2 and ST-5 tax exempt certificates are also available at this location. Go to http://vpf-web.harvard.edu/procurement, and click on "Forms to Download."

If sales tax is billed incorrectly to the cardholder's account, it is the responsibility of the cardholder to dispute the charge as outlined in the section "Disputing a Transaction."

The Ordering Process        top of manual          PCard homepage

The Purchasing Card may be used to purchase goods in person at the supplier site, over the phone or Internet, via fax, or by mail. When placing your order:

• Identify yourself as a Harvard employee.
• Inform the supplier that you are using a Harvard Purchasing Card.
• Provide the tax exempt status and tax exempt number listed on the front of the card.
• Inform the supplier that they are not to send a bill or invoice to the ordering local unit or Accounts Payable.
• Provide cardholder name.
• Provide individual Purchasing Card number.
• Provide expiration date on the card.
• Provide delivery address including building and room number.
• Provide description of goods to be ordered and confirm prices.
• Confirm that the total order including shipping and handling does not exceed your single-purchase limit.
• Provide any other information necessary to make the purchase.

If a supplier that you regularly use does not accept the Purchasing Card, you may choose to contact GE Capital (1-800-274-7378). Provide them with the name, address and phone number of the supplier so they may contact the supplier and instruct them on how to become MasterCard capable.

Upon receipt of your order, keep the documentation received from the supplier (typically a sales receipt or packing slip with pricing information) for reconciliation (refer to Proof of Purchase Documentation). Each week you will receive, or have access to, a listing of your purchases. Check this report against your sales receipts and packing slips to ensure that you have received everything for which you have been charged.

The cardholder is responsible for ensuring receipt of goods, and for following up with the vendor to resolve any delivery problems, discrepancies or damaged-merchandise concerns.

Upon reconciliation, forward the statements and all supporting documentation to the Purchasing Card Administrator or Reviewer in your local unit who has been assigned responsibility for document retention.

Reviewer Responsibility        top of manual          PCard homepage

All transactions should be reviewed in the settlement system prior to the general ledger sweep. Local units are responsible for identifying “Reviewers” and establishing a transaction review process. The reviewer is the individual responsible for regularly verifying transactions on the settlement system, changing default coding and adding business purposes, where required, and maintaining supporting documentation. Each cardholder should have an assigned reviewer. However, in limited circumstances, local units may give cardholders authority to review their own transactions.

Depending on the local unit’s business needs, a reviewer may be assigned access to all transactions in a number of security groups, all transactions in a single security group, all transactions of select cards, or access to transactions of his or her own card. Upon request, the Procurement Management Office will provide financial deans with a monthly report of unreviewed transactions.

Purchases made on your card are charged to a pre-established default general ledger account code (default cannot be a sponsored fund). Purchasing Card transactions are posted to the PCard Settlement System usually within one to three business days. Designated users will log on to the settlement software using their web browser. Access to the system will vary by local unit. Some local units may not allow cardholders to access the system at all. Some will allow read-only access. Your Purchasing Card Administrator or Reviewer has the ability to change account codes on individual transactions using the PCard Settlement System. Once a transaction is loaded onto the settlement system, users will normally have a minimum of ten, and a maximum of fourteen, business days to make any necessary changes to the default GL accounts numbers, or add a Business Purpose where required. When all transactions for a given sweep date have been reviewed, a settlement system Report should be printed, and corresponding receipts attached, to be kept on file. It is the responsibility of the Reviewer to ensure that all transactions are reviewed before being swept, and that all appropriate documentation is kept on file locally (see Proof of Purchase Documentation, below). However, all transactions will be swept automatically, regardless of whether they have been marked as reviewed.

Accounts Payable sweeps transactions from the settlement database into the general ledger every Thursday afternoon. Transactions that have been on the system for two weeks prior are updated to the general ledger and marked as swept. Once transactions are posted to the general ledger, adjustments to GL account codes can only be made through journal entries.

If you have any questions regarding access to the PCard Settlement System, please refer to the Purchasing Card Administrator or Reviewer in your local unit who has been assigned responsibility for this process.

Proof of Purchase Documentation        top of manual          PCard homepage

With the authority to purchase comes the responsibility for maintaining adequate documentation at the source of the transaction. It is the responsibility of each tub and local unit to develop a process and assign responsibility for document retention in accordance with Harvard's Record Retention Policy, set forth in the Harvard University General Records Schedule, available on-line at http://hul.harvard.edu/rmo.

Whether a purchase is made in person or via telephone, Internet, fax, or mail, the Cardholder must obtain a sales receipt or a Purchasing Card sales slip (the same document you receive when you use your own credit card) from the merchant. Cardholders must forward all supporting documentation, (including credits to the Purchasing Card) to the Purchasing Card Administrator or Reviewer who has been assigned responsibility for document retention. Original receipts (or Missing Receipt Affidavits) must be kept on file for all transactions $75 and over. These receipts will assist in the verification of the online transaction history. They are also required to be filed for auditing purposes.

Original documentation must support the legitimate business purpose of all transactions made with the Purchasing Card. Documentation must include the name of the supplier, location, date and dollar amount. The following are examples of supporting documentation:

• detailed cash or sales receipts
• packing slips with a dollar amount
• subscription or dues forms
• conference registration forms
• statement of work reports from suppliers
• photocopies of software mail-order forms

Once a month you will receive a cardholder statement from GE Capital. This is for your information and review purposes only. DO NOT PAY THIS STATEMENT. Harvard will pay GE Capital directly.

SPECIAL SITUATIONS:

Business-related meals and entertainment, and taxis (always local taxis with PCard) require a statement of business purpose. The Business Purpose field should contain the following information: who incurred the expense (the name of the group or a list of attendees); what the expense entailed; where the expense was incurred; when the expense was incurred; and why this is a Harvard expense.

All telecommunications service charges on the PCard must be exclusively for Harvard business. While it is recognized that telecommunication services are commonly used across the University community, Harvard has an obligation to ensure that IRS requirements are met when paying for such services. If a charge has a non-Harvard business component it must be identified and reimbursed by the employee to Harvard (e.g., cell phone service used 50% for Harvard business and 50% for personal business). All transactions must be reviewed in the settlement system prior to being swept. A detailed business purpose must be included for each transaction. Original invoices must be retained and available for review in local units. Telecommunication service charges may be charged to sponsored funds only when they have been approved and meet the terms and conditions of the sponsoring agency.

All PCard charges to third-party payment providers (like PayPal, the payment tool used by eBay merchants) require a statement of business purpose. The Business Purpose field should contain what the expense entailed and why it is a Harvard expense, along with the vendor name if it is not included in the transaction data. Procurement Management, along with Risk Management and Audit Services, strongly recommend that PCard holders purchase from Harvard's vendor partners, rather than from on-line auction sites such as eBay. (For more information on Harvard's preferred vendors, visit the Procurement Management website, at http://vpf-web.harvard.edu/ofs/procurement/) However, it is understood that sometimes PCard holders must use on-line auction sites and other merchants using third-party payment providers to purchase goods not directly available from vendors.

Transactions under $75 do not need receipts unless otherwise required by funding agency requirements.

Missing receipts require the completion of a Missing Receipt Affidavit signed by both the cardholder and the Purchasing Card Administrator or Reviewer with a complete explanation of the expense and the reason for the missing receipt.

For purchases where no receipt is generated (e.g., a recurring subscription expense), a copy of the cardholder statement with a complete explanation of the expense will suffice. Note: This is only allowable when a receipt is not generated. A copy of the cardholder statement is not sufficient when a receipt is lost.

Foreign exchange / currency conversion rates associated with international charges will be reflected on your monthly statement. This conversion rate may facilitate reconciliation of expenses. If you need assistance with obtaining this information sooner, you may contact the Purchasing Card Administrator or Reviewer in your local unit who has access to this information via the PCard Settlement System, or GE Capital directly (1-800-274-7378).