FILE:  DJEAC

Cf:  DJE

LACARTE PROCUREMENT CARD

LaCarte is a tool used to assist in the management of purchasing and accounting.  LaCarte is a Visa card issued by Bank of America for the State of Louisiana and political subdivisions of the state.  This card will enable employees to purchase items with the convenience of a credit card, while maintaining control over those purchases.  The use of this card will improve efficiency and effectiveness by reducing costs associated with processing purchases and payments and will allow for the receipt of goods more timely.

The use of LaCarte will be limited to low-dollar orders ($500 or less) during the initial implementation of the program.

This policy and/or procedures is not intended to replace current Purchasing Policies, Rules and Regulations.

DEFINITIONS

The Procurement Card is a separate bank credit card account established by School Board authorization for individual, school, and/or department to use in making small purchases from School Board approved contracts or emergency purchases.

The Procurement Card Custodian is the individual who has the responsibility for the credit card including authorizing disbursements, accounting and reconciliation of the procurement card account.  The custodian shall sign a Memorandum of Understanding statement for the Procurement Card and shall be responsible for all charges on the credit card account.  Reimbursements to the credit card company for the Procurement Card shall be handled by Purchasing.

PURCHASING CARD ADMINISTRATION

1. Purchasing Responsibilities
   
   The Purchasing Department is responsible for the district wide contract administration of the Purchasing Card Program.  The Purchasing Card Administrator shall serve as a central point of contact to address all issues and changes necessary to the overall program, and coordinate such changes with the contractor, Bank of America.
   
   The Purchasing Department shall set district policies including limits, allowable merchant category codes and approve agency participation in the program.  Purchasing shall also determine individual department maximum limits based on program compliance, staff experience, training and factors that promote the overall use of the program.
   
   The purchasing department shall be responsible for keeping abreast of program updates and dissemination of this information to the Department Head, card custodian, and any other School Board personnel as deemed appropriate.
    

2. Department Responsibilities
   
   Department responsibilities include administration of their purchasing card program, and compliance with School Board guidelines identified here.
   
   The Department Head shall be responsible for designating their card custodian and for notifying the Purchasing Department of any changes.
   
   Departments are also responsible for following proper controls and School Board policies and procedures as well as:

1. • Determining card custodian and setting individual cardholder limits for single transactions, daily and cycle transaction limits as well as cumulative spending limit within agency delegation of authority.
      

   • Educating card custodian on use of card, sales tax issues, and 1099 reportable vendors.
      

   • Determining allowable merchant category codes for Department based on department needs; and providing justification to Purchasing to remove/add exclusions on statewide merchant category codes recommendations.
      

   • Requesting cards, monitoring the issuance of cards, ensuring prompt reconciliation of periodic statements, and preparing statistics and reports to document the results of the Program.
      

   • Maintaining budgetary controls.
      

   • Performing routine post audits to determine that purchases under this program meet School Board policies and procedures.
      

   • Establishing and enforcing personnel policies to discipline employees in the event of abuse or failure to comply with established guidelines.
      

   • Establishing procedures to cancel and collect cards when it is determined it is no longer needed or upon termination of the employee.
      

   • Establishing and assigning accounting codes for card custodian.  There shall be an accounting code for each appropriated Department.
      

   • Maintaining accounting codes when appropriated programs are added/deleted, employees are reassigned or if it is determined an incorrect accounting code was assigned.
      

   • Reconciling paper statement to payables voucher, and distributing costs to the proper accounting codes.

PROGRAM REQUIREMENTS

1. Card Issuance

1. 1. Cards are to be issued to St. John the Baptist Parish School Board employees only.
       

   2. Card custodian must be approved by the Department Head.
       

   3. Card custodian must secure and control card at all times.
       

   4. Card custodian must sign a Cardholder Agreement form and complete training prior to a card being issued.
       

   5. Card custodian shall be given a copy of policies and procedures for LaCarte Program.
       

   6. Cards will be embossed with St. John the Baptist Parish School Board, Department Name, Employee Name, Employee account number and School Board tax-exempt number.
       

   7. Accounting codes must be assigned to each cardholder.

2. Card Use

1. 1. LaCarte is limited to use:

1. 1. 1. By individual School Board employees authorized by the Department Head.
          

      2. By cardholder only.
          

      3. For official School Board use only.
          

      4. For individual purchases up to $500.
          

      5. For use on approved Merchant Category Codes.

1. 2. LaCarte shall not be used (regardless of dollar amount):

1. 1. 1. For personal use.
          

      2. To avoid appropriate procurement or payment procedures.
          

      3. To access cash.
          

      4. For travel or entertainment services.
          

      5. For contracted services or 1099 reportable vendors.
          

      6. For alcohol.
          

      7. For fuel and maintenance on the Fuel Card and Maintenance Program.
          

      8. Payment prior to receipt of goods (except for professional books and subscriptions).
          

      9. Personal service contracts/consultant agreements/ performance groups.
          

      10. Fees/Memberships/Dues.
           

      11. Gifts (i.e., balloons, flowers, staff treats, student prizes).
           

      12. Charitable contributions.
           

      13. Any item(s) that will overspend the line item budget amount.
           

      14. Any item that is not allowed by law or School Board policy. (If unsure, please ask BEFORE purchase.)

3. 1099 Reportable Vendors

1. 1. LaCarte cannot be used for 1099 reportable vendors.  In order for a vendor to be considered 1099 reportable both the vendor and the type of payment being made to the vendor must be 1099 reportable.
       

   2. Generally 1099 reportable vendors are:

1. 1. 1. Sole proprietorships, individuals or a group of individuals, partnerships, trusts, or independent contractors that receive payments for rents, prizes and awards, health care, non-employees compensation, medical, legal and other services.  This includes supplies if the supply is incidental to the service;
          

      2. Corporations that provide medical, health care or legal services;
          

      3. Any vendor subject to backup withholding tax.

1. 3. More information can be found on 1099 reportable vendor in the IRS 1099 Instruction Booklet.
       

   4. Failure to follow these instructions will result in the department manually tracking these types of payments and processing of form 1099.  Penalties of up to $250,000 can be assessed by the IRS for not properly reporting.

4. Sales Tax

1. 1. State and local sales tax should not be charged on card purchases.
       

   2. Card custodian should make every effort at the time of purchase to avoid being charged state and local sales tax.
       

   3. In the event state and/or local sales tax is charged and a credit is warranted, it will be the card custodian's responsibility to have the vendor-merchant (not Bank of America) issue a credit to the cardholder's account.
       

   4. It is School Board policy not to pay sales tax.

5. Documentation

1. 1. Ensure that documentation is adequate and sufficient to adhere to Purchasing guidelines for recording of expenditures.

PAYMENT, RECONCILIATION AND DOCUMENTATION

1. Payment Procedures

1. 1. The Department shall ensure that necessary procedures and controls are in place for prompt payment, reconciliation and cost distribution of charges and credits.  Department specific policies and procedures must be developed.  These policies should address required approvals and authorizing procedures.  Copies of this policy must be made available to all card custodians and other personnel responsible for LaCarte.
       

   2. Bank of America will send paper statements and/or an electronic file containing all cardholder transactions.
       

   3. The paper statements and the electronic Statement Billing File shall be sent within five (5) days of the close of the billing cycle chosen by the Agency.  The billing cycle for all Departments shall be the 5th of each month.
       

   4. Payment must be made electronically to Bank of America within twenty-five (25) days of receipt of invoice.
       

   5. The Statement Billing File or the paper statement shall be used by departments to create a payables voucher.  This document shall use the accounting codes assigned to the cardholder at the time of issuance.

2. Reconciliation and Cost Distribution

1. 1. The card custodian must document the date of purchase, the vendor name, description of the item, amount, receipt date and accounting code, reporting category, location, etc.  This may be accomplished by maintaining a "Purchasing Log" or recording information directly on the receipt from the vendor for each purchase and/or credit made with LaCarte.
       

   2. Card custodian shall receive paper memo statements monthly from Bank of America within five (5) days of the close of the billing cycle.
       

   3. The card custodian must reconcile purchases made during the billing cycle by matching the memo statement to the Purchasing Log and/or the documentation obtained from the vendors on purchases.  The documentation shall be reviewed and certified by the cardholder as received or reported as a disputed item.  The cardholder shall then forward this information including the accounting distribution information to his/her supervisor or designated reviewer.
       

   4. The supervisor or designated reviewer should review the information and documentation submitted by the card custodian.  The reviewer should verify that acceptable documentation exists (including line item description/ price and accounting distribution) to support each purchase and/or credit, verify that purchases are for official School Board business, and that purchases comply with appropriate rules and regulations.  The supervisor or designated reviewer should sign the purchasing log or memo statement certifying his review and approval.  The documentation, log and memo statement shall then be sent to the Purchasing department.
       

   5. The statement shall only be paid with the original invoices and/or receipts attached to the statement.  It is the cardholder’s responsibility to ensure that this documentation is attached to the billing statement.  If the billing statement incurs late payment charges because the cardholder turns it in late, these late payment charges shall be deducted from the cardholder’s pay.
       

   6. The cost of all transactions which do not adhere to School Board policy shall be deducted from the cardholder’s pay.
       

   7. If it is determined that personal or other unauthorized charges are occurring on the card, appropriate steps, up to and including dismissal, shall be taken to resolve the misuse/abuse of the card.
       

   8. Upon receipt of the purchasing log and supporting documentation, the Purchasing department shall review documentation to ensure that the required reconciliation is accurate and audit the documentation.  The charges are then distributed to the appropriate accounting codes.
       

   9. Purchasing shall reconcile and distribute the charges in their accounting system.  Note:  reconciliation may take place before or after payment but payment must be made to Bank of America within twenty-five (25) days of receipt of statement.
       

   10. Departments shall complete the reconciliation and distribution processes each month and prior to receiving the next billing cycle.  All charges and/or credits should be cleared from the purchasing card.

3. Documentation

1. 1. Using department shall ensure that documentation is adequate and sufficient to allow for the proper recording of expenditures in the accounting system.
       

   2. Documentation is required for all purchases and credits.  For items purchased over the counter, the card custodian shall obtain the customer copy of the receipt.  When ordering by telephone, fax, or computer, the cardholder must obtain a packing list or similar document.  For items such as subscriptions and registrations, where the vendor does not normally generate a receipt or packing slip, a copy of the ordering document may be used. Acceptable documentation must include a line description and line item pricing for the purchase.
       

   3. Each department will maintain permanent file of all purchasing logs and supporting documentation.  This file will be subject to periodic review by School Board appointed auditor, internal auditor and any other duly authorized auditor.

AUDIT

1. Post Audits
   
   Post audits of card custodian transactions shall be performed to monitor the number and amount of purchases made; vendors used, as well as detailed transaction information.  Accounting and Purchasing may use InfoSpan software to produce exception and spending analysis reports to support control and audit of the purchasing card program.
    

2. Vendor Specific Audit
   
   As part of the annual financial and compliance audit, the School Board shall require additional audit procedures to be performed on procurement card transactions.  The procurement card transactions shall be audited specifically and more extensively than is normally required by Generally Accepted Audit Standards.

SAFEGUARDING OF PROCUREMENT CARD

1. GENERAL GUIDELINES

1. 1. The Procurement Card should be in a secured area/place that is lockable when not in use.
       

   2. Notify the Finance Department immediately of any changes in the authorized card custodian of any Procurement Card.
       

   3. Misuse of the Procurement Card may result in discipline and/or personal liability for dishonored charges.  Upon such revocation the School Board shall not be liable for any costs subsequently charged to the Procurement Card.
       

   4. Notify the Finance Department immediately in the case of theft or loss of the Procurement Card.
       

Revised:  October, 2006

Ref:    La. Rev. Stat. Ann. §17:81

Board minutes, 11-15-01, 7-20-06

St. John the Baptist Parish School Board