# Presentation: 659926

## Purchase Card Basics 

*Purchase Card Basics *

**A Refresher Course for Card Holders and Approving Officials**
**Department of Commerce**
**Frank Krempa               ****           April 2004**

- DOC P-CARD BASICS

**Notes:**
Welcome to Bank Card Basics,  brought to you by the Customer Outreach and Programs (COAP) Team of Commerce Acquisition Solutions

I am Frank Krempa   202 482-0997  room 6521

I am the Agency Program Coordinator,  also known as the APC.   I process set-up applications and changes.    We will refer to the APC a lot in this training.   

For those of you who attended previous Purchase card training, you should notice the training has been streamlined to make it easier to use and remember.  We also saved some trees by cutting the package in half.  

For those who love facts, figures and US Code references, stop by or email your request to me.  

## DOC Purchase Card Training

- INTRO
- ESTABLISHING KNOWLEDGE BASELINE
- COURSE MATERIAL OUTLINE
- MEASURING TRAINING EFFECTIVENESS
- COURSE EVALUATION

- DOC P-CARD BASICS

**Notes:**
INTRO I have already introduced myself- lets talk about class and the bankcard  program
SIGN IN-  please sign the attendance sheet.  It is necessary to validate the DOC Purchase card program, and your attendance.

KNOWLEDGE BASELINE –  A QUIZ   no big deal,  names optional.   All answers can be found in the GSA SmartPay book,  GSA On-line training, which most of you have completed, and in the NEW Procurement Newsletter.

COURSE OUTLINE - REVIEW COURSE MATERIAL   Designed with a focus on using the card, and some background so you understand the DOC program, including adminsitrative 

POST TRAINING QUIZ -   Relax-  it’s the same quiz. 
Did you learn anything?  Does the material or approach need to be changed?  An analytical approach -  near instant feedback  helps us identify areas that need attention-  if every got the same question wrong, we reword the question, reword the instruction,  or throw it out, (the question, not the material or the instructor!)  

EVALUATION  - FEEDBACK-  USED TO IMPROVE THE WAY WE PROVIDE TRAINING       We sometimes get conflicting comments, but if we get consistent feedback (positive or negative) we have a few data points.  Some people liked two instructors, some people didn’t.  Some people wanted a break, most wanted to finish early.  Most folks want help with statement  reconciliation.  Overall, most people were pretty happy with the last class. 

THIS COURSE IS DYNAMIC – WE WILL REVISE IT AS REGULATIONS AND POLICY CHANGES,  AND MAKE CHANGES TO MAKE IT MORE EFFECTIVE.
WE CAN “FINE-TUNE” THE TRAINING TO SUIT THE NEEDS OF SPECIFIC GROUPS (WITHIN LIMITS – THE BASICS ARE STILL THE BASICS) 

## Training Outline

- Why use Bankcards?
- Process and mechanics of getting a card
- Things a Bankcard holder needs to know
- How do I properly use a card ?
- Purchasing process
- Documentation requirements
- WARNINGS !
- Prohibited items and practices
- Using the card, getting quotes
- Checks and balances
- Reviews and audits
- Miscellaneous topics
- Convenience checks, proposed credits history checks
- Changes and new policies
- References

- DOC P-CARD BASICS

**Notes:**
This training has been updated to incorporate CAM changes

Hold up CAM change

Reflects increased attention to Purchase card program, and management efforts to control fraud, waste, abuse, and misuse.   Includes Congressional and OIG attention. 

## Why use the Government Purchase Card?

- Purchase cards save money
- You are in control
- Its faster
- Merchants are happier

- DOC P-CARD BASICS

**Notes:**
Purchase cards save money by reducing the number of Purchase Orders (SF 347) an agency generates  - reduce the cost of creating those orders

Use that money for operating expenses like  goods, services, training, salaries and bonuses in your office

You are in control  of the process
There is less confusion – speak directly with the vendor 
Make simple decisions and choices yourself

Its faster- 
You get it when you need it, not when someone else gets to it

Merchants are paid sooner 

## Obtaining a Government Purchase Card

- Your Approving Official nominates you.
- Take your Online Training.
- Submit an Account Set-up Form –         you need your Hierarchy and your Account Codes - ask your admin officer.
- Verification is Mother’s Maiden Name.
- Bankcard Center Needs your SSAN.
- Include SPL and Cycle Limit.

- DOC P-CARD BASICS

**Notes:**
Speakers Notes:     A little administrative background on the “application and process”  process
Nominates:
The approving official identifies the need for a bankcard
Considers you a trustworthy person and capable of managing the purchase card account

Establishes the :    Number of cards in the office relative to number of actions
Single purchase limits  & Cycle (Monthly) limits

You complete the required On-line training  at  www.fss.gsa.gov/webtraining/trainingdocs/smartpaytraining/index.cfm
Or   www.casc.noaa.gov/bankcard/bankcard.html

Forms available electronically

Forward GSA SmartPay training cert and Set-up form to APC  (Frank or Dan) for processing.

See the March Procurement Newsletter for some additional information on account codes

## Filling out the form.

- Smith

- Jane

- O.

- DOC  OS  (Director Acronym)  (Office Acronym)

- Mothers Maiden Name

- 222-33-4444

- 1401 Constitution Ave, N.W.

- Room or Office Routing Code

- 202-482- Your Desk #

- Washington                     DC                           20230

- Your Email Address @doc.gov

- 202-Your FAX #

- 2004 51 0153000 000 11 09 0000 00 00 00 00 25 99 00 00    Check w/ your  Admin/Budget  folks.

- 01300       81539       ?????       ?????

- $10,000

- $2,500 unless SAP Training

- Approving Official Signature                                                               Date

- Name                                                                Phone Number                  Fax Number

- DOC P-CARD BASICS

**Notes:**
Please  be careful to provide all required information and  that it is correct.  
Let me say that again -  Provide all the information or the processing may be delayed, or your application may be returned 

The accounting codes may require help from your Admin Officer.  This is important to get it right.  Have your budget or Admin person initial that the codes are correct.    This is a new requirement to avoid the code correcting “fire drills” that we’ve gone through lately.  

The Hierarchy should include four levels.  If you are establishing a new hierarchy, not just a new account, you will only have three levels and APC will provide the fourth level.  The hierarchy applies to your office and should be available from your Admin person or your AO. 

## Cardholder Responsibilities 

- Secure the card.
- Maintain a purchase log.
- Make informed buys of approved products or services.
- Have funds available.
- Respect single purchase and cycle limits.
- Reconcile and document transactions.
- Use card ethically.

- DOC P-CARD BASICS

**Notes:**
Secure means lock it up, and do not permit other people to use it.    This is also known as  Card Control.   
SAY AGAIN -  It is your card, and no one else should use it. 

The official policy “book answer”  is don’t keep it on your person to avoid inadvertent usage.   A card for COOP usage would be an exception. 

Take precautions so that your account (account number)  is not compromised.   Report loss or theft of your card to the APC and Bankcard center immediately.

Use your purchase card log when you make a purchase - know what, where and when you bought something, and how much you spent.  This will help you know when you approach the cycle limit.    Compete if required  -  over $2,500   Know the requirement  -  do some homework    Be aware of  Required Sources

Have funds available -  Anti-deficiency Act is a law that requires you to have the money before you buy.  The bankcard is not intended to finance your purchases.  We do pay interest when your payment is late.   Purchase limits are designed to help offices manage their budgets.  The bankcard will usually stop a purchase – “not authorize” the purchase, if it exceeds either of the limits.  
Reconcile your statements –  it is your responsibility to make sure the correct accounts are charged, including program and Budget Object Codes.  Congress is pushing agencies, through the Inspector General (OIG), and the Agency Program Coordinators (APC)  to audit and review purchase card programs.  See the Checklist in the book and in the CAM as a reference.   Not for personal use under any circumstance     Not to personally benefit from use.        Rotate vendors

## Standards of Ethical Conduct	

- Public trust
- An employee may not accept a gift that is offered because of their official position.
- This includes gratuities, favors, discounts, loans, services, meals or lodging.
- Additional scrutiny has been placed on the Purchase Card Program because of fraud, waste, and abuse issues.
- For more detail, see usoge.gov/pages/laws_regs_fedreg_stats/laws_regs.html

- DOC P-CARD BASICS

**Notes:**
When fraud, waste, abuse or misuse is discovered the media goes wild, the public freaks, and congress moves to get a handle on things and to restore confidence is management and government spending.  

Think in terms of public trust.  When a vendor feels they didn’t get a fair opportunity they feel cheated and violated.  They may complain to someone, like a congressman.

When the public hears someone misused a card, they feel cheated and that they pay more in taxes than is necessary because of waste or misuse.   Can you stand the “heat” or attention if this action shows up in the paper?

The facts are a very small fraction of purchase card expenditures are fraudulent, wasteful, abusive or misuse.  But, when spending PUBLIC money, any misuse is a breach of faith.  

Fraud, waste and abuse, or misuse of the Purchase card may result in administrative or criminal penalties. 
No Kidding -  people have lost their jobs and been sent to jail for misuse of the card.    Fines are also possible.

You may not personally benefit as the result of using the card

## 8 Steps to remember before you buy 

- Plan your monthly purchases
- discounts vs. unnecessary stockpiling
- cycle limit considerations
- Ensure availability of funds
- Conduct market research
- Best value approach
- State Sales Tax Exemption
- Be clear when talking with merchants
- Recognize your Single Purchase and Cycle Limit
- Use Required  sources
- JWOD,  GSA, FPI

- DOC P-CARD BASICS

**Notes:**
KNOW YOUR LIMITS -  YOUR PURCHASE CAN BE REJECTED !! 
SINGLE PURCHASE – DON’T SPLIT REQUIREMENTS
BE AWARE OF YOUR CYCLE (MONTHLY) LIMITS 

INCREASES CAN BE ARRANGED – EMAIL FROM AO TO APC WITH REASON, NEW LIMIT, DURATION 

HAVE THE MONEY BEFORE YOU USE THE CARD -  IT’S THE LAW  --  ADA   

RESEARCH -  PERSONAL EXPERIENCE,  CATALOGS, PREVIOUS ORDERS,   QUOTES  

BEST VALUE- THE POINT IS OVERALL ECONOMY AND EFFICIENCY, INCLUDING THE VALUE OF YOUR TIME AND EFFORT
IS THE PRICE FAIR AND REASONABLE?   DON’T SPEND DOLLARS TO SAVE NICKELS -  

THE CARD IS CODED TAX EXEMPT -   MOST VENDORS RECOGNIZE THAT-  
IDENTIFY YOURSELF AS A GOV EMPLOYEE MAKING AN OFFICIAL PURCHASE AND ACTION SHOULD BE TAX EXEMPT -  
TAX LETTERS  ARE AVAILABLE

BE FAIR - INTEGRITY IS A KEY ISSUE – 

ROTATE ORDERS AMONG VENDORS-  IT HELPS KEEP THEM HONEST AND COMPETITIVE

REQUIRED SOURCES – YOU MUST USE REQUIRED SOURCES-  EVEN IF THEY AREN’T THE LOWEST PRICE.  
JWOD,  FPI,   GSA

IF THERE IS AN AVAILABILITY OR DELIVERY PROBLEM-  DOCUMENT IT!! 

## Prohibited Items

- Rental or lease of land or Buildings.
- Travel.
- Cash Advances.
- Other agency prohibited items.
- e.g.  Microwave ovens, refrigerators -  See CAM Sec 3.4
- Software and Hardware
- These requirements are authorized only with advance approval by OCIO.
- Notice to Property Management
- 	Before purchase
- 	After delivery for bar-coding

- DOC P-CARD BASICS

**Notes:**
Don’t use the Purchase card for travel expenses -Use travel cards for travel expenses

Some other restrictions -   see manual for details   Section 3.4 of the CAM
examples -  Personal Convenience Items  coffee pots, microwave ovens, refrigerators  

Coordinate with George Imber for IT  HW/SW requirements 

## Get a GOOD Quote !!

- Make sure everything is included!
-  Shipping, express shipping, set-up,  parts, warranty, trade-in, and training.
- Are you being charged sales tax?
- Usually the Government is Tax Exempt.
- The Purchase Cards are coded “Tax Exempt.”
- Tax Exempt letters are available if your vendor requests one – check on-line references at the end of this presentation to obtain one.
- By law we must be fair, be consistent, ask for the same thing from each vendor.
- Make sure that your vendors accept the Government Purchase Card!

- DOC P-CARD BASICS

**Notes:**
Ask the vendors questions if you don’t understand something. It is easier for everyone to discuss issues before the order is placed, than it is to correct a misunderstanding, especially if you need to “find” more money.

The card is coded Tax Free – some vendors don’t recognize that and may ask you for the Tax Exempt Certificate.  Those are on file electronically -  see Tax Letters. 

Be careful when you describe your requirement  - details like model number, sizes, hours, versions, and any options,  etc might help.   Example: Was that a  CD or a Read-Write CD?   Which Version of software?  Basically, ask for the same product, or make it clear that you are willing to accept, and evaluate proposals on slightly different products.   You asked for a 27 inch TV but will accept a 26 inch TV.   

Best Value is the driving concept, but you need to be able to justify what you did.

Confirm that the vendor accepts the Government Purchase card. Ask – it is a problem more often than you think.  Trying to convert a failed bankcard transaction to a purchase order may result in a ratification

## Don’t Split Requirements !!

- Breaking up your requirement into parts to stay under your Single Purchase Limit (SPL) is prohibited.
- Temporary increases can be arranged and processed quickly – usually within one day.
- If you need frequent increases, consider a higher limit.  Note: Single Purchase Limits (SPL)  over $2,500 require additional training.  *(Simplified Acquisition Training Course - 40 hours).*

- DOC P-CARD BASICS

**Notes:**
For assistance Call the COAP Office -  Frank Krempa x 20997 or Dan Alexander, x 27426  
Have your Approving Official send an email explaining the purpose of the request, and what the increase should be, such as increase from $2,500 to $5,000 or $10,000 and for how long, usually through the billing cycle. 

Splitting requirements to stay under your SPL is prohibited.  It is easy to detect during a review.  Don’t do it.

If you find yourself needing frequent temporary increases, maybe you need a higher limit.  SPL over $2,500 require Simplified Acquisition training, a 40 hour course.

Training is available locally Mgt Concepts Inc., Logistics Mgt Inc, and GSA

## Document and Keep Records

- Keep and use a log, record dates.
- Keep item description, unit price, quantity and total cost.
- Name of merchant.
- Keep the receipt.

- DOC P-CARD BASICS

**Notes:**
The request needs to be approved by the AO, and have evidence of funds availability   
The Purchase Card is NOT a credit card

Use the purchase request and authorization form

If the action was competed, be sure to document that

Remember to use required sources (JWOD, FPI, GSA), and to rotate sources, as appropriate.

Receipt of products has been an area of concern lately.   Keep the receipt and have someone sign it.  Usually it should be someone other than the person who ordered the item. 

Requesting, ordering and receiving by the same person leaves poor records and often leads to misuse.   

## Accountable Property

- Notify Property Management if this item is accountable   (valuable and or pilferable)

- DOC P-CARD BASICS

**Notes:**
Electronic items, TVs, Computers, especially Laptops are common items that are accountable

DOC policy is Equipment is accountable

Notify Property management prior to purchase and after delivery

## Returns, Credits  and Disputes

- Work with the merchant if there is a problem
- File a dispute with Citibank if you could not resolve the problem

- DOC P-CARD BASICS

**Notes:**
Usually vendors are good about processing returns or credits.   Try to work things out.  If the vendor is uncooperative, you may need to process a dispute. 

Disputes -  use the Dispute form

## Reconcile Your Statement 

- The only way DOC can manage its budget is if everyone does their part.
- The HOW –TO  mechanics will be offered as a refresher course by the NIST CAMS.
- Be aware of your default codes
- DOC receives rebates based on usage and payments.

- DOC P-CARD BASICS

**Notes:**
Reconcile your statement and forward to your Approving Official

You may need to make adjustments to your default account for each item, especially the Budget Object Code,  often 2500 or 2599

Some cardholders – Procurement Specialists and cardholders using reimbursable accounts need to pay attention because the charges are often different than the DEFAULT codes established on their account set up forms 

Call your admin officer for help with codes.  Call your the CAMS helpdesk or APC for assistance with reconciliation 

If your office needs training or a review, or you have several new Cardholders or AOs,  training can be arranged with the CAMS helpdesk. 

 Reconcile your statement-  it affects the rebates!!   
 Reconcile your statement -  the money needs to be charged to the correct account!!

## Purchase Card Maintenance

- Changes require notice – use the maintenance form.
- Name change, limit change, hierarchy change  (Office reorganization), Approving Official,  Fund Codes (ACCS).

- DOC P-CARD BASICS

**Notes:**
Use the Card Maintenance form to process changes -   name change, got married,  new hierarchy,  changed accounts

AO Signs-   forwards to APC

## Lost, Stolen, or Compromised Card Number	

- Notify the Bankcard Center and the Agency Program Coordinator  Immediately
- You will get a new card  reissued

- DOC P-CARD BASICS

**Notes:**
Call the Bankcard center immediately if your card is lost, stolen or compromised 

If you can’t reconcile your Purchase Card statement when you receive it, at least scan it to see if there is anything wrong with it.  

## Canceling Your Card

- If you leave DOC, or no longer are a Cardholder, notify the APC.
- Turn it off, Cut it up, Turn it in
- If your card has been lost, stolen or compromised, notify the APC. The card can be cancelled and reissued.

- DOC P-CARD BASICS

**Notes:**
Action is documented and processed on a Card maintenance form.   AO signs the maintenance form, forwards to APC

Account closures are coded:    
Deceased, closed account (works in DOC but changed jobs or didn’t need card anymore, inactivity, or left agency)  (includes  retired).  

Please indicate reason on your maintenance form.

Turn it off by closing account

Cut the card in half and forward it to APC 

## Miscellaneous

- Convenience Checks
- At this time DOC is not using Convenience checks
- They are like money and require special controls
- Congress has suggested that Credit Checks be run on employees being considered for Bankcards

- DOC P-CARD BASICS

**Notes:**
DOC OS policy is no Checks at this time

Credit checks -  suggested, being reviewed for implementation, costs are a problem as well as privacy issues

## Changes to the Purchase Card Program

- Purchase Card Delegation memorandum
- Far more formal in the future.
- Buying Green – Environmentally Friendly
- Purchase Card Program Review
- From Audit to Best Practices Review.

- DOC P-CARD BASICS

**Notes:**
THIS DELEGATION MEMO FORMALIZES THE DELEGATION OF PURCHASE CARD AUTHORITY 

ADDRESSES ENVIRONMENTALLY SOUND PRODUCTS

PROVIDES ADDITIONAL REVIEW, REPORTING  AND CERTIFICATION REQUIREMENTS 

## Annual Program Reviews

- CAM 1313.301  Section 4.1 specifies requirements.
- Primary Objectives
- Share great practices
- Assess compliance techniques (w laws and regulations.)
- Assess efficiency of operations.
- Assess internal and management controls in place to bolster public trust
- to prevent or find fraud, waste, and abuse.

- DOC P-CARD BASICS

**Notes:**
REVISIONS TO THE CAM DATED FEBRUARY 1, 2004

The changes most likely to affect you are the review requirements

Assess Compliance
Assess Efficiency
Assess controls regarding Fraud, waste, abuse, and misuse

## Annual Program Review (continued)	

- Purchase card annual review check list.
- Regulations require that the APC complete one checklist for each individual cardholder reviewed.
- Summary of findings to include:
- Areas of extraordinary success.
- Areas of non-compliance.
- Recommendations for improvements.
- Certification of completion of annual review.

- DOC P-CARD BASICS

**Notes:**
The annual review is now specified in the regulation.  We are required to review a RANDOM Sample of orders.  The samples however, must include examples from  Procurement cardholders,  1102, or 1105/1105,   non-procurement cardholders with SPL= $2,500 and non-procurement cardholders with SPL > $2,500.

Summary includes number of  total records reviewed,  percent of cardholders reviewed,  total value of purchases, percent change in use of purchase card, measured by number of purchases.

HCO certifies completion of Annual Review

ONE CHECKLIST PER CARDHOLDER-
FUNDING, AUTHORIZATION, DOCUMENTATION, REQUIRED SOURES, RECEIPT

THE PURPOSE OF THE REVIEW IS TO DOCUMENT NONCOMPLIANCE OR MISUSE

REVIEW ALSO MAKE RECOMMENDATIONS TO USERS,  USERS MAY SUGGEST CHANGES TO REVIEWERS  

## References

- TAX LETTER
- http://apps.fss.gsa.gov/services/gsa-smartpay/taxletter/
- GSA  MANUAL  -  Blueprint
- www.fss.gsa.gov/services/gsa-smartpay
- DOC ACQUISTION MANUAL
- http://oamweb.osec.doc.gov/stage/app/cam.htm
- FORMS
- www.casc.noaa.gov/bankcard/forms.html

- DOC P-CARD BASICS

## FOR HELP

- CALL COAP or visit room 6521
- Frank Krempa   482-0997
- Dan Alexander  482-7426

- DOC P-CARD BASICS

**Notes:**
PLEASE CALL EMAIL OR VISIT IF YOU HAVE QUESTIONS