### **UNITED STATES DEPARTMENT OF AGRICULTURE**

**RURAL DEVELOPMENT**

#### Rural Business Cooperative Service 601 Business Loop 70 West (573) 876-0976

**Rural Housing Service Parkade Center, Suite 235 FAX (573) 876-0977**

##### Rural Utilities Service Columbia, MO 65203 TDD (573) 876-9480

April 2, 2002

TO: All Employees

FROM: Gregory C. Branum

State Director, Rural Development

SUBJECT: Guidelines for Using the VISA Purchase Card/Convenience Checks

[PURPOSE/INTENDED OUTCOME]{.underline}: To provide updated instructions
and guidance for use of the VISA Purchase Card and Convenience Checks.

[COMPARISON WITH PREVIOUS AN]{.underline}:

This replaces MO AN#1354 (2024-A) dated January 28, 2000, which expired
December 31, 2000.

[IMPLEMENTATION RESPONSIBILITIES]{.underline}:

The USDA Government-wide Commercial Purchase Card is a payment method
designed for use in small purchase programs for micro purchases
(supplies and/or services of \$2,500 or less, and construction
procurements of \$2,000 or less). Currently RD uses credit cards and
convenience checks for expenditure of *[administrative funds
only]{.underline}*. However, we continue to work with our Fiscal Control
Branch and NFC for enhancements to the Type 60 purchase order system
that will facilitate using the card/checks for "program" expenditures.

The objectives of using the purchase card/convenience checks are to
reduce administrative costs, allow agencies to procure supplies and
services faster, promote efficiency, and to provide for comprehensive
management information for program oversight. Although the purchase
card/convenience check is the preferred method for purchases under the
simplified acquisition threshold {\$100,000}, our **first requirement**
is to still obtain goods and services from government **established
sources** (i.e.: Agency Excess, Federal Prison Industries {UNICOR},
Granite City Warehouse, GSA Customer Supply

Center, and JWOD office supply vendors such as Staples, Office Depot,
Boise Cascade, BT Office Supplies International, Corporate Express and
Innovative Sales Brokers). **Only when the supplies or service are not
available from one of the established sources of supply can we go to
open market sources such as Wal Mart**.

## USE OF THE CARD/CHECKS

All purchases are subject to all Federal and agency statutes and
regulations, including Part 8, "Required Sources of Supplies and
Services", and Part 13, "Simplified Acquisition Procedures" of the
Federal Acquisition Regulation (FAR), which can be viewed at
[**www.arnet.gov/far/**](http://www.arnet.gov/far/). In the event a
vendor will not accept the purchase card, a convenience check may be
used to process the transaction in accordance with Debt Collection
Improvement Act (DCIA), Public Law No. 104-134, criteria.

1.  [Authorized Card/Check Use]{.underline}. Cardholders are authorized
    to utilize the VISA purchase card or convenience check to procure
    all commercially available goods and nonpersonal services required
    to meet the minimum needs of the Government. Authorized uses of the
    card/check are as follows:

> **Budget**
>
> **[Description]{.underline} [Object Code]{.underline}
> [Allocation]{.underline}**
>
> Copier/Typewriter Repairs 2535 Equip. Maintenance
>
> Film Development 2410 Printing
>
> Printing 2421 Printing
>
> Meeting Room &/or Booth Rental 2340 Leasing
>
> Notary Expenses 2580 Other
>
> Office Equipment & Furniture 3140 Equipment
>
> Subscriptions 2660 Supplies
>
> [Supplies]{.underline}
>
> ADP (toner, etc.) 2630 Supplies
>
> Copier 2672 "
>
> General 2671 "
>
> GSA CSC 2680 "
>
> Training & Registration Fees 2523 Tuition

2.  [Unauthorized Card Use]{.underline}. "Unauthorized use," means the
    use of a credit card by a person, other than the cardholder, who
    does not have actual, implied, or apparent authority for such use,
    and from which the cardholder receives no benefit. Restrictions on
    the use of the card are as follows:

a\. Cash advances and/or travel advances;

b\. Rental or lease of land or buildings in excess of 180 days;

c\. Telecommunications (telephone) services;

d\. Rental or lease of motor vehicles;

e\. Purchase of airline, bus, train, or other travel related tickets;

f\. Purchase of meals/banquet charges, lodging or other travel or
subsistence costs;

g.  Purchase of fuel, oil, services, maintenance and repair, to GSA
    vehicles;

h.  Personal purchases or identification (e.g., while paying for a
    personal purchase by check), or security for personal purchases;

i.  Acquisition from commercial sources (open market -- e.g., Wal Mart)
    of products or services available from an established source in time
    to meet the agency's need; or

j\. Splitting requirements into several purchases merely to avoid the
cardholder's delegated single purchase limit.

[RESPONSIBILITIES:]{.underline}

1\. [Cardholders]{.underline}. Cards/Checks are issued to individuals
who may purchase authorized goods within

> the requirements of the FAR. Cardholders are responsible for:
>
> a\. Assuring that funds are available, via Form AD-700, before making
> purchases.

b\. Recording each credit card/check purchase on a purchase card log
{See Attachment 1};

> c\. Assuring that the card/check is used only for authorized
> purchases;
>
> d\. Assuring that the card/check is protected from loss, theft or
> misuse;
>
> e\. Reporting promptly any lost or stolen card by contacting Bank of
> America at 1-800-472-1424;
>
> f\. Assuring that all transactions are within the cardholder's
> purchase limits;

g.  Obtaining the vendor's Employer Identification Number (EIN) or
    Social Security Number (SSN), as applicable, prior to submitting the
    request for approval; and

h.  Properly reconciling each purchase using the Purchase Card
    Management System {PCMS} on-line reconciliation and payment
    procedures. You need to be sure to modify the accounting and object
    class codes so that they agree with the codes shown on your
    "approved" AD-700. **NOTE**: The accounting code for the A/O will be
    used for ALL film development and GSA charges.

> The following documentation will be retained with the purchase card
> log:

i.  The card receipt or packing slip;

ii. Form AD-700 signed by S/O confirming that funds are available or GSA
    Form 3542 (both forms are available on the Snap Server);

iii. If purchase is a telephone order, written documentation providing
     the name of the person taking the order, date of the order, cost of
     item(s), etc. This information may be written on either of the
     above forms, as applicable. For telephone orders, all items must be
     readily available or delivered within 30 days of the placement of
     the order.

######## FILE AND RETENTION: All documentation supporting cardholder purchases must be retained for three (3) years from the purchase date. Final payment date is the date the purchase is reconciled (approved) in PCMS. All information/documentation shall be maintained **monthly** in a file folder labeled as follows:

**2024-A PCMS Documentation for MONTH &
FY:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
APPROVED:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
DESTROY:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

####### If the file becomes too thick, enter the last approved/destroy dates, and begin a new file stating 

####### **"PCMS documentation for MONTH \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_."**

[TAX-EXEMPT]{.underline}. There are two (2) ways the credit
card/convenience check can be used to authorize payment for a purchase:
(1) over the counter or (2) by telephone where the account number is
conveyed to the merchant. "US Government Tax Exempt" appears on each
card along with the Federal Tax Exempt ID#. Therefore, when making any
purchase that will be paid with the card/check, the cardholder should
inform the merchant that it is for official U.S. Government purposes and
therefore is not subject to state or local sales tax. **The Federal
tax-exempt number is 47-1600000, and our State tax-exempt number is
13457802**.

[ERRORS AND DISPUTES]{.underline}. If items purchased with the
card/checks are found to be defective, the cardholder is responsible for
obtaining a replacement or correction of the item(s) from the merchant
as soon as possible. If the merchant refuses to replace or correct the
faulty item(s), then the purchase of the item(s) should be disputed. If
this situation occurs, please contact Lue.

[CARD SECURITY:]{.underline} It is the cardholder's responsibility to
safeguard the credit card/convenience checks and account number at all
times. The cardholder shall never use the card/checks to procure
personal items. A violation of this trust will require that the card be
withdrawn from the cardholder with the possibility of subsequent
disciplinary action. The cardholder may be liable for payment of the
purchase.

1\. [Lost or Stolen Cards]{.underline}. The cardholder should contact
Bank of America's Government Card Services Unit (GCSU) by telephone at
1-800-472-1424 to report the lost card, and also contact Lue as the
LAPC. If the card/checks are found after being reported as lost or
stolen, it/they should be sent to the LAPC (that's Lue) for proper
disposal. Cards are normally replaced within 2 business days after the
loss is reported.

2\. [Separation of Cardholder or Cancellation of the Card]{.underline}.
If the cardholder leaves the agency or changes to a job that does not
require a card, the card must be returned to the S/O.

3\. [Card Reissuance]{.underline}. Cards are reissued every 24 months to
active cardholders. The S/O will receive a Card Reissue Report at least
60 days before the expiration of cards, and will be responsible for
notifying the bank, within 30 days of receiving the report, which cards
to reissue. Should a card need to be reissued for other reasons (i.e.,
change of name, etc.), please notify Lue.

4\. [Card Receipt Verifications/Activation]{.underline}: As a security
measure, new cards and replacement cards for lost, stolen, or reissued
accounts are not usable until the cardholder calls Customer Service at
1-800-227-6736 to activate their account.

5\. [Stop Payment Requests]{.underline}: A cardholder that needs to stop
payment on a check is to contact Lue and the Bank immediately.

[Card Misuse/Fraud:]{.underline} Procurement laws, regulations, and
procedures place upon the cardholder direct responsibility for the
proper and lawful execution of procurement actions. Any act exceeding
the cardholder's authority is no longer an act of the government, but
becomes a ***personal*** responsibility. Misuse of the purchase
card/convenience checks will require the purchase card/checks to be
withdrawn from the cardholder. In addition, disciplinary actions may be
taken against the cardholder, and the cardholder will be liable for
payment of the purchase.

**Remember that, prior to using the purchase card or issuing a
convenience check, you must have received funds approval for
*[each]{.underline}* requirement from the State Office via an AD-700.
The only exceptions to this requirement are GSA supplies and film
development, for which each A/O has already been given an allocation.**

We look forward to again having a successful purchase card program in
Missouri.

If you have any questions, please do not hesitate to contact Lue at
extension 1333.

<table>
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<tbody>
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<td><strong>ORD. DATE</strong></td>
<td><strong>NAME OF VENDOR</strong></td>
<td colspan="3"><p><strong>BUSINESS</strong></p>
<p><strong>STATUS</strong></p></td>
<td></td>
<td><strong>ITEM DESCRIPTION</strong></td>
<td><strong>QUAN.</strong></td>
<td><strong>AMOUNT</strong></td>
<td><strong>DATE REC'D.</strong></td>
<td><strong>FINAL $</strong></td>
<td><strong>CK. #</strong></td>
<td><strong>DATE RECONCILED</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td><blockquote>
<p>SB</p>
</blockquote></td>
<td><blockquote>
<p>WO</p>
</blockquote></td>
<td><blockquote>
<p>SDB</p>
</blockquote></td>
<td><blockquote>
<p>LG</p>
</blockquote></td>
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<td>TOTAL $</td>
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</tr>
</tbody>
</table>