State of Oklahoma Purchase Card Procedures Effective December 14, 2010

1. State of OklahomaPurchase Card ProceduresEffective December 14, 2010 Issued by Central Purchasing

2. Introduction • The State of Oklahoma P-Card is a Visa Purchasing Card issued by the Bank of America (BOA) • The BOA P-Card contract is administered by Central Purchasing • There are no fees associated with the program • The terms of the Statewide Contract allow Higher Education and Political Subdivisions to participate in the program; however they are entitled to implement their own policy governing the use of the card; • It is the only credit card authorized by the State of Oklahoma

3. Implementation & Maintenance • To Join the Program: • Submit a request on entity letterhead, signed by the Entity’s Chief Administrative Officer, to the State P/Card Administrator via email or fax and include the Entity’s P/Card Administrator name and contact information • State P/Card Administrator will forward an “Implementation Actions” worksheet advising the next steps

4. Implementation & Maintenance • Changing the Entity’s P/Card Administrator or Back-up: • Submit a request on entity letterhead, signed by the Entity’s Chief Administrative Officer, to the State P/Card Administrator via email or fax advising of the changes

5. Organization Executive Steering Group State Purchasing Director State P/Card Administrator State Entity P/Card Administrator State Entity Approving Officials State Entity Approving Officials P/Cardholders P/Cardholders P/Cardholders P/Cardholders

6. Conditions of Participation • State Entities must abide by the terms of these Procedures • A “Request for Exception” form can be completed requesting to make a purchase contrary to the Procedures • Found on the DCS website at www.dcs.ok.gov, Central Purchasing > P/Card Information > P/Card Forms > Form 030 • Forward to the State P/Card Administrator by email or fax for approval prior to making the purchase (if declined, cardholder will not be able to make the purchase with the P/Card)

7. Conditions of Participation • State Entity’s P/Card Procedures must be included in Entity’s Internal Purchasing procedures • Must designate where P/Card transaction documentation is securely retained • Revised Internal Purchasing Procedures must be submitted to Central Purchasing within six (6) months of completing P/Card implementation

8. Conditions of Participation • Audit • All transactions are subject to audit by • State Auditor and Inspector • DCS • OSF • Detailed transaction documentation supporting P/Card transactions shall be securely retained by the State Entity and made available upon request • State Entity P/Card Procedures shall designate where P/Card transaction documentation is securely retained

9. Open Books • All transactions are listed on the State of Oklahoma Open Books website, listing • Cardholder’s last name, first initial • Vendor • Amount of transaction • Itemized Description if vendor is a “Level 3” vendor

10. Open Books

11. Revenue Sharing • Provided to all participants based on • Total Dollar Spend • Average Transaction Size • Speed of Pay • Divided among participants based on agency spend

12. Definitions • Cycle – means the period of time between billings; our cycle closing date is the last business day of the month; • Low Dollar Acquisition – means an open market acquisition that is fair and reasonable and does not exceed $5,000.00; • Merchant Category Code (MCC) – means a standard code the credit card industry uses to categorize merchants based on the type of goods or services provided by the merchant; • Merchant Category Code Group (MCCG) – means a defined group of merchant category codes. MCCGs are used to control whether or not P/Cardholders can make purchases from particular types of merchants;

13. Definitions • Single Purchase Limit means the maximum spending limit a P/Cardholder is authorized to charge in a single transaction. • Cannot split purchases for the purpose of evading: • Statutory Single Purchase Limit of $5,000 (not including Central Purchasing Statewide Contracts, Regulated Utilities, Interagency Payments, & Professional Services as defined in 18 O.S. § 803) • Limits established for an individual P/Card; • A competitive bidding requirement

14. Definitions • Split Purchase means dividing a known quantity or failing to consolidate a known quantity of an acquisition for the purpose of evading a competitive bidding requirement; • Statewide Contract means a contract issued by DCS Central Purchasing for specific acquisitions for a specified period, with a provision allowing the agencies and Political Subdivisions to place orders as acquisitions are needed; • Transaction Documentation means all documents pertaining to a transaction

15. Participants • State Entity P/Card Administrator and Back-ups • State Entity Approving Officials and Back-ups • Must be one level above P/Cardholder • P/Cardholders • Includes Lodging Only P/Cardholders • Does not include • Those assigned to create the P/Card voucher or payment • Those designated as Accountants in Works when this is their only role in the P/Card program

16. Employee Status • P/Card participants must be a full time or permanent part time employee of a State Agency • Cannot be a temporary or contract employee

17. Training • All P/Card participants must complete initial training conducted by Central Purchasing; • All participants must complete refresher training every five (5) years: • Conducted by Central Purchasing; or • Conducted by State Entity P/Card Administrator (must provide Central Purchasing with proof of attendance) • If P/Cardholder will be making “Lodging” purchases only, training may be conducted by State Entity P/Card Administrator (must provide Central Purchasing with proof of attendance) • State Entities new to the P/Card program must attend OSF P/Card Voucher Training

18. Purchase Card Employee Agreement • All participants must read and sign the Purchase Card Employee Agreement • If participant holds multiple roles, separate agreements must be completed for each role • State Entity P/Card Administrator is responsible for completing and maintaining page 2 of the Agreement • State Entity P/Card Administrator retains original and provides P/Card participant with a copy

19. P/Card Management & Reports • State EntityP/Card Administrator is responsible for performance or appropriate delegation of the following duties: • Processing and retaining P/Card Program Reports: • Monthly Statement; • Invoice; • RPT 170 Transaction Report • TXN Detail w/Level 3 - Gen Purchase Report • Other reports are available in Works and urge P/Card Administrators to utilize these as well • Processing and retaining P/Card Employee Agreements

20. P/Card Management & Reports • State Entity P/Card Administrator is responsible for performance or appropriate delegation of the following duties: • Establishing written P/Card program policies and procedures; • Processing authorized requests for P/Cards, maintaining control over active cards, and closing accounts; • Establishing and maintaining usage controls and determining cardholder’s need for the P/Card; • Auditing of reports and transactions to identify unauthorized use; • Auditing a random selection of cardholder’s monthly statements for accuracy • Setting Lodging Only P/Cards in “Suspense” status in Works with Credit Limits at $0.00 when not in use

21. P/Card Management & Reports • State Entity P/Card Administrator is responsible for performance or appropriate delegation of the following duties: • Retaining detailed transaction documentation supporting P/Card transactions • Make available upon request • Establish procedures for maintaining necessary data before it is removed from Works • Paper Copies • Electronic Copies, must meet • OSF Information Security Policies, Procedures and Guidelines • Oklahoma Archive Commission Rules

22. Issuing the P/Card • Once training is completed, the State Entity P/Card Administrator orders the card online • Must provide: • Monthly credit limit; • Single Transaction limit; • MCCGs

23. Issuing the P/Card • Front of P/Card includes: • Cardholder’s name and agency name • “State of Oklahoma” and State Seal • State Tax ID Number

24. Issuing the P/Card • Once P/Card is ordered, it is • Delivered to the State P/Card Administrator • Checked for accuracy • Training is verified • Forwarded to State Entity P/Card Administrator for distribution • Must sign the Employee P/Card Agreement upon receipt of the P/Card

25. Property of the State • Corporate Liability card; • Upon termination of employment with the state agency, cardholder must surrender the card to the State Entity P/Card Administrator prior to leaving; • State Agency and State P/Card Administrator may also request the cardholder to surrender the card; • Upon surrendering of card; State Entity P/Card Administrator shall document page 2 of the Employee P/Card Agreement and destroy the card; • State Entity P/Card Administrator shall also deactivate the card in Works and delete the User information

26. Card Replacement • Expired Cards • BOA will automatically issue a replacement card prior to expiration • Defective Cards • State Entity P/Card Administrator can order replacement cards online • Cut expired, defective, or canceled cards through magnetic strip and forward to Approving Official who forwards it to the State Entity P/Card Administrator for documentation and destruction

27. Card Security • P/Card is limited to person whose name is on the card; • Do not loan your card; • Do not use another person’s card; • If possible, file card in a secure, locked place when not in use; • Must return card to the State Entity P/Card Administrator if leave employment • State Entity P/Card Administrator must close out page 2 of the Employee P/Card Agreement

28. Lost, Stolen or CompromisedCards • Immediately report any lost, stolen or compromised cards to BOA at (888) 449-2273 • Complete a Lost/Stolen P/Card Notification form found on the DCS website at www.dcs.ok.gov, Central Purchasing > P/Card Information > P/Card Forms > Form 31 • Forward the original to your State Entity P/Card Administrator, keep a copy of the form with your Statement, and forward a copy to your Approving Official • Remember – the State Agency is responsible for purchases on lost, stolen or compromised P/Cards until BOA is notified

29. Statutory References • All purchases shall be made in accordance with State statutes, rules, and these Procedures, which include but may not be limited to: • Central Purchasing Act, 74 O.S. § 85.1 et seq. • State Travel Reimbursement Act, 74 O.S. § 500 et seq. • DCS, Central Purchasing Codified Rules, OAC 580:16 • Office of State Finance (OSF) State Travel Procedures • State Agency Internal Purchasing and P/Card Procedures

30. Purchasing Requirements • P/Card purchases must comply with statutes, rules, and procedures, as well as: • State Use Contracts • Mandatory Statewide Contracts • Oklahoma Corrections Industries (OCI) • Internal Purchasing Procedures • Remember required forms • OSF Form 115 for IT or Telecommunications • Accessibility • Inventory requirements

31. Using the P/Card • P/Card is issued in your name and shall be used only by you; • P/Card can be used at merchants accepting VISA. Merchants may require a minimum purchase amount of $10.00 (does not include Statewide contracts); • Purchases can only be made within your Single Transaction Limit and Credit Limit assigned to your card; • Cardholder is responsible for reconciling all transactions; • P/Card is not intended to avoid or bypass appropriate purchasing or payment procedures; • P/Card is not for personal use • P/Cardholder shall ensure prices paid are fair and reasonable

32. Methods of Purchase • Walk-In; • Telephone; • Internet • Make certain internet site is a secure location, for example: • “s” on the end of https means it is a secure site; or • Lockbox will appear on the site

33. P/Card Limits • There is no limit on the amount of a P/Card transaction for the following: • Statewide Contract purchases • Regulated Utilities • Interagency Payments • Professional Services as defined in 18 O.S. § 803 • For any other transaction with a state purchase card, the transaction shall not exceed $5,000

34. P/Card Limits • P/Card limits shall be based on need and/or past usage • May set the Single Transaction Limit less than $5,000 • May set the Single Transaction Limit greater than $5,000 • Statewide Contract purchases • Regulated Utilities • Interagency Payments • Professional Services in accordance with 18 O.S. § 803 • Do not set Single Transaction Limit inappropriately high

35. Utility Bills • P/Card may be used to pay utilities: • Regulated Utilities: • Unlimited Dollar Amount; • Print page verifying it’s a regulated utility and file with statement; • Non-Regulated Utilities: • Yearly total must be less than $5,000; • Identification of Regulated vs Non-Regulated Utilities • Oklahoma Corporation Commission website – www.occ.state.ok.us • Divisions > Public Utility then select the applicable utility

36. Interagency Payments • Interagency is defined according to 74 O.S. § 1003 (Interlocal Cooperation Act) and includes, but not limited to: • Political subdivisions • Federal Government • Public Trusts • Interagency payments between State Agencies, Universities, and Colleges: • Should be made by voucher, selecting the payment method “WIR” • DCAR Newsletter, Vol. 21, No. 7, dated February 18, 2011 (page 3)

37. Advance (Pre-)Payments • P/card purchases are subject to Office of State Finance Procedures Manual, Section 319, Special Procedures, Chapter L., Advance Prepayments • Can use p/card for conference registration when: • Discount is provided for paying in advance; • Can substitute a participant; • If event is canceled, cardholder receives a full refund

38. State Sales Tax • State of Oklahoma is exempt from Oklahoma State Sales Tax • State Entities also have immunity from taxes imposed by Oklahoma municipalities, which includes, but not limited to: • City Sales tax; • Occupancy tax; • Tourism tax; See DCAR Newsletter Vol 20, No. 6, dated 03/11/2010 regarding immunity from local taxes

39. Convenience Fees • Convenience Fees are fees that might be charged by vendors for accepting credit cards • Strictly regulated by Visa and MasterCard • Convenience Fees may be allowed for certain transactions if charged in compliance with Visa rules • The following fees are NOT allowed by Visa regulations: • Credit Card Fees • Processing Fees • Surcharges

40. Convenience Fees • Convenience fees may be allowed by merchants who offer an alternate payment channel (i.e., mail, telephone, or e-commerce) • Merchant must adhere to the following rules: • Fee is being charged for a bona fide convenience of using an alternative payment channel outside the merchant’s normal business practice • The customer must be given the opportunity to cancel prior to the completion of the transactions

41. Convenience Fees • Merchant must adhere to the following rules (Cont’d.): • The fee: • Must be disclosed to the customer as a charge for the alternative payment channel convenience • Is applied only to non face-to-face transactions • Must be a flat or fixed amount, regardless of the amount of payment due • Is applied to all forms of payment products accepted in the alternative payment channel • Is included as part of the total transaction amount • Cannot be added to a recurring transaction • Is assessed by the merchant that provides the goods or services to the cardholder and not a third party

42. Convenience Fees • Visa is very clear about what a convenience fee is and how and when they can be charged. As a result, many vendors that charge fees do so incorrectly and are therefore out of compliance with Visa regulations

43. Convenience Fees • Examples of common violations • Charging a tiered or percentage based fee • Charging a fee for transaction below or above a certain dollar amount • Charging the fee in person, for face-to-face or point of sale transactions • Charging only for Visa or credit card transactions. Convenience fees must be applied to all payment methods accepted via that channel • Calling the fee a processing fee, credit card fee or surcharge • Charging higher prices for credit card purchases versus checks or cash • Charging a convenience fee via the internet when that is the vendor’s only “normal business practice”.

44. Convenience Fees • Example of an allowable convenience fee: • A utility that charges a convenience fee for paying a bill via the phone or internet versus having to come to an office and drop off a payment. As long as the convenience fee is a flat fee and is charged to all transactions accepted via the phone or internet (such as all card types, electronic checks, etc), it is acceptable on a P/Card transaction

45. Prohibited Purchases • Split Purchasing; • Entertainment; • Per diem food; • Transportation – except airfare and vehicle rental on SW contract; • Cash or cash advances; • Purchase of goods or services for personal use or not for official State use; • Any transaction or series of transactions exceeding your p/card limits; • Motor fuel and automotive general maintenance; • Automatic Drafts; • Gift Certificates except for employee recognition in §74-4121

46. Travel Purchases • Except for airfare and lodging, all other travel-related expenses are prohibited on the P/Card, such as: • Meals, including room service • Hotel Telephone or Internet • Parking • Taxi Cabs • Traveler must pay out of pocket for all other travel related expenses • Travel Claim may be submitted by the Traveler for reimbursement of travel related purchases prohibited on the P/Card

47. Travel Purchases • In the case of inadvertent personal charges, the Traveler shall reimburse the State for any and all personal expenses charged to the P/Card • Repayment can be made by • Check or cash submitted to the State Entity; or • By an adjustment reducing a subsequent travel voucher

48. Travel Purchases • Procedures to reimburse the State for personal charges • Actual check or cash to the Agency • Deposits must be cross-referenced to the P/Card voucher with erroneous charge • Voucher comment field must reference deposit number and enter brief description

49. Travel Purchases • Procedures to reimburse the State for personal charges • Adjustment reducing a subsequent travel voucher • Reduction made as a negative amount on subsequent travel voucher to appropriate hotel accounting code • Must cross-reference the erroneous P/Card voucher with the subsequent travel voucher being reduced • Enter brief description in Comment field on Invoice page on both vouchers • On subsequent travel voucher being reduced, enter voucher number of P/Card voucher having the over-payment • On P/Card voucher having over-payment, enter voucher number of subsequent travel voucher having the adjustment

50. Travel Purchases • Inadvertent personal charges placed on P/Card • Non-repayment shall result in loss of lodging P/Card privileges and other disciplinary or criminal actions