General Accounting

Division of Accounts and Reports Audit Services Team
BUSINESS PROCUREMENT CARD
GENERAL PROCEDURES
(revised August 2008) 

INDEX

100 BPC PROGRAM SUMMARY

• 110 Interagency Agreement
• 120 Responsibilities of Key Individuals in the BPC Process
• 130 Acceptance of BPC
• 140 BPC Allowed for Official State Business Only
• 150 Compliance with State Policies and Procedures
• 160 Reporting of Lost or Stolen BPCs
• 170 BPC Card Issuance and Activation
• 180 Rebates Received From UMB Bank

200 BPC CARD / CARDLESS ACCOUNT OPTIONS

• 210 BPC Cards
• 220 Basic BPC Card with Conference Registration Option
• 230 BPC Contract Accounts (Cardless Accounts)
• 240 BPC Registration Accounts (Cardless Accounts)
• 250 Automotive BPCs
• 260 Direct Lodging Accounts (Cardless Accounts)
• 270 Airfare and Car Rental Accounts (Cardless Accounts)

300 APPROPRIATE BPC PURCHASES

• 310 Clarification of Specific Allowable BPC Purchases
• 320 Prohibited BPC Purchases
• 330 Sales Tax
• 340 Request for Program Exception

400 COMPLIANCE WITH STATE REQUIREMENTS

• 410 Sources of State Guidance
• 420 Examples of State Requirements

500 SECURITY ISSUES

• 501 Agency BPC Coordinator
• 502 Account Numbers on Paperwork
• 503 BPC Credits
• 504 Lost, Stolen or Compromised Accounts
• 505 Account Maintenance
• 506 Internet Security

600 TRANSACTION DOCUMENTATION, REVIEW AND PAYMENT

• 610 Receipt Documents
• 620 BPC Logs
• 630 Special Codes Available for BPC
• 640 BPC Log Reconciliation
• 650 Processing of Purchases Pending Credit
• 660 Payment of Monthly Billing from UMB Bank
• 670 Fiscal Year Determination
• 680 Retention of BPC Records
• 690 Central Clearing Fund Reconciliation

700 ELECTRONIC RECONCILIATION SYSTEM

800 ONLINE CARD MAINTENANCE SYSTEM

100 BPC PROGRAM SUMMARY

The State of Kansas contracts with UMB Bank for the State Business Procurement Card (BPC) program. Participation in the BPC program allows an agency to process one monthly payment to UMB Bank rather than processing numerous payment vouchers to individual vendors throughout the month.

110 Interagency Agreement

In order to participate in the BPC Program, the agency must complete an Interagency Agreement For Business Procurement Card Program. The Interagency Agreement specifies agency and Department of Administration responsibilities regarding the agency's BPC program.

120 Responsibilities of Key Individuals in the BPC Process

1. BPC Coordinator. The agency BPC Coordinator is responsible for the overall operation of the program at the agency, including BPC issuance and cancellation, reporting of lost or stolen BPCs, and changing limitations of expenditures placed on individual BPCs. The BPC Coordinator is also responsible for cardholder training and shall have authority to enforce compliance with all accounting and purchasing statutes, regulations and policies to ensure the valid use of all BPCs.
2. BPC Reviewer. The BPC Reviewer(s) is responsible for reviewing transactions included on monthly BPC billings received from UMB Bank:
   1. The Reviewer shall ensure that transaction details per the UMB Bank billing are reconciled on a monthly basis at the cardholder detail level and authenticate the validity of each transaction.
   2. The Reviewer shall ensure that all disbursement data entering the accounting system is accurate, authorized, properly coded, adequately documented, and that the goods and services purchased through use of the BPC were received by the agency.
   3. The Reviewer shall have complete access to all documentation to support the data entering the accounting system.
   4. The Reviewer shall immediately follow-up on any unusual BPC activity with the cardholder, the BPC Coordinator and any other appropriate agency officials.
3. BPC Cardholder. The cardholder must be a State employee and is responsible for maintaining security over the BPC, using the BPC only for official state business and for compliance with State accounting and purchasing statutes, regulations and policies including all policies the cardholder's agency implements in the use of the BPC. In addition, the cardholder is responsible for obtaining receipt documents supporting all BPC transactions, preparing a log of BPC transactions incurred during each billing cycle and reconciling cardholder statements provided by UMB Bank to receipt documents and the BPC log for the billing cycle.
4. Department of Administration.
   1. The Department of Administration is responsible for providing ongoing program information to BPC Coordinators and providing necessary assistance to agencies upon the request of BPC Coordinators.
      
      Tim Hund    (785) 368-6347   (tim.hund@da.ks.gov) 
   2. The Department of Administration is also responsible for auditing the agency's BPC transactions on an annual basis to ensure compliance with all applicable accounting and purchasing statutes, regulations and policies in the operation of the BPC Program.
5. Agency. The agency is responsible for maintaining necessary internal controls and implementing recommendations resulting from audits by the Department of Administration and other independent audits of the Program, including the Legislative Division of Post Audit. Also, the agency is responsible for maintaining written procedures for the agency’s BPC program.

130 Acceptance of BPC

The BPC may be used for appropriate purchases from vendors who accept the VISA card (in-store purchases, as well as mail, telephone, Internet and fax orders).

140 BPC Allowed for Official State Business Only

BPCs are issued at the request of an agency in an employee's name and are the property of the State to be used for the State purposes defined in this document. Since BPCs are restricted to State use only, a cardholder's personal credit history is not reviewed as part of the BPC issuance process. BPC usage is audited by both the agency and the Division of Accounts and Reports.

A. The cardholder may not make personal purchases with the card.

1. In the first instance of a personal purchase with a BPC, the personal purchase may be left on the BPC if immediate reimbursement is received from the cardholder.
2. State agencies should correct any subsequent personal purchases by reversing the original charge rather than by receiving reimbursement from the cardholder.
3. In addition, the card should be cancelled if personal purchases are made with the BPC on an ongoing basis.

B. BPC cards are issued for official State business. Items which will not be paid through STARS (i.e., funds in the State Treasury) may not be purchased with the BPC card.

C. Cash advances are prohibited BPC transactions.

150 Compliance with State Policies and Procedures

The BPC is not intended to avoid or bypass State policies and procedures. Rather, the BPC is to be used within the guidelines of existing policies. Purchases that would not normally be allowed should not be made using a BPC.

160 Reporting of Lost or Stolen BPCs

Lost, stolen or compromised BPCs should be immediately reported to the agency BPC Coordinator and UMB Bank. Phone numbers for UMB Bank are listed below.

Business hours (Monday through Friday; 8:00 AM to 5 PM)      816-843-2458

Other than business hours      800-449-9176

170 BPC Card Issuance and Activation

1. BPCs are issued in the names of specific State employees. A BPC should only be used by the employee to whom it was issued. BPCs should never be shared among employees of a work unit, etc.
2. Employees are not personally liable for charges to BPCs, unless BPCs are used inappropriately.
3. The agency's BPC Coordinator is responsible for requesting BPCs from UMB Bank.
4. UMB Bank forwards BPCs to the Coordinator.
5. The Coordinator provides training to cardholders and completes a Business Procurement Cardholder Agreement, to be signed by the cardholder. The completed and signed Cardholder Agreement should be retained by the agency.
6. Upon completion of the above steps, BPCs are given to the cardholders.
7. Cardholders should sign cards immediately and store cards in secure locations.
8. The card issuer (UMB Bank) has implemented a card activation feature for all BPCs. The nine-digit activation number is the cardholder's social security number unless other arrangements have been made between the agency coordinator and UMB Bank. This procedure includes new issuances, normal expiration reissues, and replacement cards for damaged or lost cards. If a cardholder or coordinator requests a reissue, the account is deactivated immediately. Coordinators are responsible for ensuring that cardholders are aware of the activation code.
9. BPCs are generally reissued every two years.

180 Rebates Received From UMB Bank

A. Agencies participating in the State's BPC Program receive rebate checks from UMB bank for transactions charged to BPC Cards/Accounts in the previous calendar year. Rebate amounts are calculated based on a percentage of the amount of transactions charged to BPCs during the rebate period. Rebate rates are summarized below:

Payment Made within 30 days – 1.43% to 1.47%

Speed of Pay – 1.56% to 1.71% (base rebate rate increased by .131% for payments received within 20 days and by .245% for payments received within 10 days)

The Division of Accounts and Reports receives 50% of the rebate distribution to offset the cost of administering the program, i.e., annual audits, processing of agreements, conducting training, etc.

B. Rebates received should be deposited in the State Treasury and may be coded as a reduction to current fiscal year expenditures.

200 - BPC CARD / CARDLESS ACCOUNT OPTIONS

The BPC program has both carded and cardless options available, as described below:

210 BPC Cards

Commodities, capital outlay items and contractual service items (coded in the 2000, 3000 and 4000 series of expenditure sub-object codes) may be charged to BPC Cards. Individual BPC Card transactions are limited to $5,000 per purchase. Orders charged to BPC Cards shall not be split in order to avoid BPC Card transaction limits. If account limits are not sufficient for the cardholder’s needs, the cardholder should request that the agency’s BPC coordinator raise the limits, if appropriate. The ongoing occurrence of split orders will result in Card cancellation.

1. Transactions coded to 1099 reportable expenditure sub-object codes are allowable BPC transactions. These specific codes may be found in the Division of Accounts and Reports Policy and Procedure Manual, Filing Number 7,002 (Uniform Expenditure Classification Sub-Object Codes). The Division of Accounts and Reports is implementing a process to automate 1099 reporting for all BPC transactions made on or after January 1, 2008.
2. Agencies are free to establish transaction dollar limits of less than $5,000 ($500, $1,000 or $2,000, for example). In addition, agencies have an option to set limits on the number of daily and billing cycle transactions for each BPC. Desired BPC transaction limits should be communicated to UMB Bank.
3. Billing cycle limits should initially be set no higher than $10,000 for BPC Cards, unless historical usage justifies higher limits.
4. BPC Cards should always be issued in the name of an individual. Only one regular BPC should be issued to an individual, unless an exception is approved by the Division of Accounts and Reports.
5. BPC Accounts with no usage for one calendar year should be reviewed and cancelled if future usage is not anticipated, or deactivated (credit limit reduced to $1) if future usage is anticipated.

220 Basic BPC Card with Conference Registration Option

Basic BPC Cards issued with the conference registration option are limited to key individuals within an agency. These cards must be preapproved by Division of Accounts and Reports and are limited to $5,000 per purchase.  Billing cycle limits should initially be set no higher than $10,000, unless historical usage justifies higher limits.

In instances where one night's lodging must be prepaid as a condition of making lodging reservations for an employee, the one night's lodging prepayment may be charged to an agency BPC authorized for registration transactions.

230 BPC Contract Accounts (Cardless Accounts)

Contract Accounts are established to purchase only those commodities, capital items and contractual services (as specified in Section 210) included on statewide open-end contracts and items offered in the state use catalog (State of Kansas Products and Services Catalog. Items not included on statewide open-end contracts shall not be purchased with Contract Accounts. Transaction limits shall be negotiated with UMB Bank. Billing cycle limits should initially be set no higher than $10,000, unless historical usage justifies higher limits.

240 BPC Registration Accounts (Cardless Accounts)

Agencies are authorized to establish one central BPC Registration Account or one Registration Account at each significant business unit level for the payment of conference registration fees. In instances where one night's lodging must be prepaid as a condition of making lodging reservations for an employee, the one night's lodging prepayment may be charged to an agency Registration Account. Transaction limits shall be negotiated with UMB Bank. Billing cycle limits should initially be set no higher than $10,000, unless historical usage justifies higher limits.

• An agency approved for the direct lodging cardless account may choose to charge lodging transactions to the agency’s registration cardless account rather than establishing a separate cardless account for lodging transactions.

250 Automotive BPCs

Purchases of fuel for agency owned or rental vehicles may be charged to Automotive BPCs.

1. Two card options are available for Automotive BPCs:
   
   
   1. Automotive BPCs assigned to agency owned vehicles - These cards are embossed with the agency name and vehicle (State tag) number, and are limited to purchases of automotive fuel and minor vehicle repair / maintenance charges.
   2. 'Generic' Automotive BPCs - These cards are limited to purchases of automotive fuel for vehicles rented from Enterprise. Generic Automotive BPCs are embossed with the agency name and are identified as "Enterprise 1", "Enterprise 2", etc.
   3. Rental charges for vehicles rented from Enterprise should never be charged to Automotive BPCs or regular BPCs. Also, repairs for rental vehicles are not appropriate BPC transactions.
2. In order to provide agencies more flexibility in the use of Automotive BPCs, the Division of Accounts and Reports (A&R) has delegated the authority to approve most one-time over-rides of transaction limits for Automotive BPCs to agency BPC Coordinators:
   
   
   1. Agency BPC Coordinators are authorized to directly contact UMB Bank (by e-mail) to request a one-time over-ride of the transaction limit for an Automotive BPC (if the transaction amount does not exceed $1,000). Agencies are asked to copy A&R on e-mails to UMB Bank when requesting one-time transaction over-rides.
   2. Agencies must obtain prior approval from A&R for Automotive BPC transactions exceeding $1,000.
3. We strongly recommend that signatures not be attached to Automotive BPCs. (Attaching signatures to Automotive BPCs restricts usage of the BPC when the vehicle is being driven by an employee other than the person who signed the card.) UMB Bank has indicated that transactions would be authorized if the following procedures are performed:
   
   
   1. Signature blocks on the back of cards should be left blank.
   2. Labels stating "For official State business only" should be attached to card signature blocks.
   3. Card users should be prepared to verify that they are State employees.
   4. Vendors can easily verify that vehicles are either state-owned or Enterprise rental vehicles.
4. Employees should sign Business Procurement Cardholder Agreements if agency owned vehicles are permanently assigned in their name. Although Cardholder Agreements are not required for cards assigned to "pool" vehicles or for "Generic" Automotive BPCs, we recommend that someone be assigned these cards for safekeeping and usage tracking purposes.
5. Agencies are encouraged to obtain card jackets for Automotive BPCs. Cards and receipts documenting purchases can be stored in card jackets and vehicle keys can also be attached. Use of card jackets can significantly reduce the number of lost receipts, which continues to be an ongoing problem for Automotive BPC programs throughout the State.
6. Federal excise tax is charged when automotive fuel is purchased with Automotive BPCs. Each agency is responsible for taking appropriate action to claim any refunds of federal excise taxes available to the agency.
   
   
   1. At the close of each quarter, the Division of Accounts and Reports sends each agency a report extracted from STARS that lists all motor fuel purchases made by the agency. Object codes included in the this report are:

      3508 - Motor Vehicle Parts, Supplies and Accessories - BPC Purchases

      3510 - Gasoline

      3530 - Gasohol

      3550 - Aircraft Fuel

      3910 - Agricultural Supplies, Materials and Parts

   2. Agencies are asked to verify that the purchases included federal excise tax, and add the number of gallons purchased, along with the appropriate excise tax rate per gallon. (The refund rate is based on the date of purchase and type of fuel. The appropriate rates for each quarter will be included in the cover letter sent with the report.)
   3. The Division of Accounts and Reports accumulates the completed reports and submits a consolidated excise tax refund request to the federal government.
   4. When the refund check is received, it is deposited into the appropriate agency accounts via journal voucher.
   5. Please contact Natalie Fairbank at 785-296-5304 (Natalie.Fairbank@da.ks.gov) if you have questions regarding federal excise tax.

260 Direct Lodging Accounts (Cardless Accounts)

Agencies may establish a central office Direct Lodging Cardless BPC Account (cardless account) for the payment of direct lodging charges.  Use of the Direct Lodging Account allows State employees to travel with less out-of-pocket expense and also addresses those situations in which lodging establishments are unwilling to set-up a direct bill account for one night for one person.  The account can be used for both in-state or out-of-state lodging arrangements.   Transaction limits shall be negotiated with UMB Bank.  The agency’s BPC Coordinator should contact Tim Hund for authorization to establish a Direct Lodging Account.

• The agency is responsible for ensuring that lodging rates are within the State guidelines for the particular location and that only room and taxes are charged to the Direct Lodging Account.
• Upon request, UMB Bank will provide the agency with a transmittal document containing account verification information that can be provided to lodging establishments when making reservations.
• While acceptance of the direct lodging account is high overall, lodging establishments occasionally will not accept the account for payment of a traveler’s lodging charges.  If a traveler experiences acceptance issues with the direct lodging account, the agency should contact UMB Bank to resolve those issues. 
• An agency approved for the direct lodging cardless account may choose to charge lodging transactions to the agency’s registration cardless account rather than establishing a separate cardless account for lodging transactions.

270 Airfare and Car Rental Accounts (Cardless Accounts)

A.  Agencies may establish a central office Airfare and Car Rental BPC Account (cardless account) for the payment of airfare and car rental transactions on a limited basis.  What this means is that the agency can charge airfare, car rental, registration and direct lodging transactions on the same BPC account rather than splitting those transactions between the Business Travel Account (car rentals and airfare) and the Business Procurement Card (registration and direct lodging).  Charging airfare and car rentals to the Airfare and Car Rental BPC is not mandatory and is strictly at the agency’s option based on how this fits the agency’s business needs.  Transaction limits shall be negotiated with UMB Bank.  In order to take advantage of this option, the agency (through its BPC Coordinator) needs to prepare and send a proposal to A&R, including how the agency would like to structure these accounts:

• Category of transactions – airfare, car rental, miscellaneous purchases, etc.;
• Type of account – Carded or Cardless;
• Cardholders – Department secretaries, business office employee, high volume users, etc.;
• Internal controls / special concerns if there are any; and
• >Proposed agency procedures for these accounts, including a proposed agency cardholder agreement, if available.  This will ensure that there are procedures in place for these “special” accounts when the accounts are reviewed by outside parties including annual reviews conducted by A&R or periodic reviews performed by the Division of Legislative Post Audit.

A&R will review the proposal, discuss it with UMB Bank, and notify the agency BPC Coordinator that the proposal has been approved.

B. Car Rentals

• In order for agency employees to charge car rentals to the Airfare and Car Rental Account, the agency must first provide the account number, expiration date and CVV code to the contract vendor(s) for Vehicle Rental Service. 
• The contract vendor(s) will then provide the agency with the vendor’s internal account number that is associated with the BPC.  This number should be referenced by agency employees when renting vehicles from the contract vendor.
• BPC accounts authorized for car rentals include a collision damage waiver provision.  Therefore, State agencies will have collision damage waiver (CDW) protection when using the BPC to rent a vehicle from the State’s contract vendor(s) for Vehicle Rental Service.  State employees should decline the collision damage waiver coverage on the contract vendor’s rental agreement.  In addition, the State of Kansas will not pay for other optional products offered by the contractor, such as supplemental liability protection.

C. Travel Agency Management Services

In order for agency employees to use the Airfare and Car Rental Account to purchase airfare through the contract vendor for Travel Agency Management Services, the agency must first provide the account number, expiration date and CVV code to the contract vendor.

D. BPC Expiration Dates

UMB Bank will communicate new expiration dates and CVV codes to your agency prior to the current expiration date of the Airfare and Car Rental Account.  The agency should communicate this information to the contract vendor(s) for Vehicle Rental Service and Travel Agency Management Services prior to the account’s current expiration date in order to avoid disruption in service of the account.

300 APPROPRIATE BPC PURCHASES

In addition to the general guidance provided in Section 200 regarding BPC usage, clarification regarding the appropriateness of specific purchases is detailed below:

310 Clarification of Specific Allowable BPC Purchases

1. Hazardous chemicals and materials, controlled substances and radioactive materials may be purchased with the BPC, if the cardholder has the appropriate certifications on file with the vendor. VISA has no restriction on the purchase of these types of commodities other than that they must be obtained legally. If the vendor is willing to accept orders using the BPC, it is the vendor's responsibility to ensure that the appropriate paperwork is on file with its business.
2. Animals (for lab or research use) may be acquired with the BPC.
3. Purchases may be made from vendors located in Canada, Australia and the United Kingdom. All other international purchases will be rejected by the transaction verification / approval process, unless prior arrangements have been made by the agency BPC Coordinator with UMB Bank.
4. Internet purchases are allowable BPC transactions. Refer to best practice information regarding Internet purchases at http://www.da.ks.gov/ar/genacct/audit/bpc.htm.
5. The agency BPC Coordinator should always review PayPal transactions to ensure that items purchased and vendors used were appropriate for official State business. Agencies frequently purchase items on-line from vendors that use PayPal as the payment vehicle. While there are benefits associated with purchasing items from vendors that use PayPal as the payment vehicle (items frequently are not available elsewhere and are often priced lower than at other sources), use of PayPal can result in using vendors that are normally blocked electronically by the transaction verification / approval process.
6. Cardholders should never use personal PayPal and ebay.com accounts for State business. When State business requires using these services, the cardholder should set-up an account specifically for State business.

320 Prohibited BPC Purchases

The items listed below are prohibited BPC purchases:

Alcoholic beverages

Business cards

Cash advances

Construction, renovation or installation

Food (Food purchases are acceptable for agencies with persons under their care including, but not limited to: inmates – prisons; patients – hospitals; students – higher education institutions and residential education facilities; In addition, food purchases are allowable if fees are collected for the purchase of food from meeting attendees or if food items are purchased for classroom / research use.)

Hospitality or Entertainment (Hospitality purchases are allowable if the following requirements have been met: Paid from the agency’s official hospitality funds; In compliance with PPM 3,351 – Official Hospitality Guidelines; Required internal agency approval for hospitality is attached.)

Honorariums (including reimbursement of travel expenses)

Incentive earnings (ward or inmate)

Personal items

Purchases from other State agencies – Payment for purchases from other State agencies should always be processed as interfund transactions (e.g., items purchased from Kansas Correctional Industries, etc.).

Real Estate Leases

Recruitment expenses

Travel and travel related expenses (Registration transactions are allowable on BPC Registration Cardless Accounts and on Carded BPCs with the Conference Registration Option; lodging, airfare and car rental transactions are specifically prohibited unless the agency has received prior authorization from the Division of Accounts and Reports for charging such transactions to the BPC; Also, meals are always prohibited BPC transactions.)

Weapons and ammunition (except for law enforcement purposes)

330 Sales Tax

Since the State of Kansas is exempt from paying Kansas sales tax, no sales tax should be charged for BPC purchases made in the State of Kansas. Cardholders should inform vendors that the purchase is exempt from Kansas sales tax before the purchase is processed. K.S.A. 79-3606(b) is the statutory reference for the sales tax exemption and is included on the back of the BPC. When Kansas sales tax is inadvertently included in a transaction, agencies are not required to subsequently obtain credit for tax paid if the sales tax associated with the transaction is five dollars or less.

340 Request for Program Exception

1. In order to provide agencies more flexibility in the use of the BPC, agency BPC Coordinators may authorize one-time over-rides for purchases of items (within the guidelines of existing policies) costing less than $5,000 from international vendors or from vendors with blocked merchant category codes. In addition, the agency BPC Coordinator may authorize the one-time purchase of items exceeding $5,000 from statewide open-end contracts. Ongoing purchases of items exceeding $5,000 from statewide open-end contracts should be charged to BPC Contract Cardless Accounts.
2. Agencies must request one-time approval from the Division of Accounts and Reports for all other program exceptions. An example of a program exception requiring approval from the Division of Accounts and Reports is the emergency purchase of an item exceeding $5000 on a BPC.
   • In order to obtain a program exception, the agency BPC Coordinator should send an E-Mail message to the Division of Accounts and Reports (Tim Hund and Randy Kennedy) and UMB Bank (Ron Sager and Matt Wagner) prior to purchasing the item. Include transaction details in the message (vendor, dollars, description of item to be purchased, cardholder name and any other pertinent details).
   • The Division of Accounts and Reports will reply to "all" that the transaction is approved or disapproved.
   • If the transaction would be rejected by UMB's transaction validation system at the time of purchase, UMB will temporarily assign an override strategy to the account.
   • Agencies should retain copies of exception approval documents with transaction documentation in agency BPC files.
     

400 COMPLIANCE WITH STATE REQUIREMENTS

Use of the BPC does not exempt a state agency or its officers and employees from complying with statutory requirements and the State's purchasing and accounting guidelines.

410 Sources of State Guidance

Guidance regarding specific issues can be obtained from the following sources:

1. The Division of Accounts and Reports Policy and Procedure Manual 
2. Kansas Statutes Annotated
3. Kansas Administrative Regulations
4. Audit Reference Information (provides references to specific policies and statutes for questions, which arise on a recurring basis)

420 Examples of State Requirements

Examples of state accounting and/or purchasing requirements include, but are not limited to, the following items:

1. Required purchases (K.S.A. 75-3321) from the State of Kansas Products and Services Catalog (State Use Catalog).
2. Required purchases from Kansas Correctional Industries (K.S.A. 75-5276).
3. Required purchases from statewide open-end contracts. If you have specific questions, please contact your agency's Purchasing Director or the Division of Purchases.
4. Transactions with other state agencies shall be processed as interfund transactions on SOKI ³⁺.
5. Capital items charged to BPC cards shall be included in the agency's inventory records. The agency is responsible for compliance with the requirements of Filing No. 13,001 (Property Inventory) of the Accounts and Reports Policy and Procedure Manual.
6. The agency is responsible for compliance with the requirements of this manual.

500 SECURITY ISSUES

Each agency is responsible for establishing an appropriate internal control environment for BPC responsibilities, including approvals, auditability, adjustments, record keeping, reporting, reconciliation, segregation of duties and supervision.

501 Agency BPC Coordinator

The agency BPC Coordinator may not be a BPC cardholder.

502 Account Numbers on Paperwork

Please be aware that "active" account numbers are included in the paperwork supporting the payment to UMB Bank. These account numbers could be used to make unauthorized charges to BPCs. We suggest that agencies restrict access to supporting paperwork while the UMB billing is in-process and that paperwork be filed in a locked file cabinet once the billing has been paid.

503 BPC Credits

1. The agency is responsible for ensuring that outstanding credits are subsequently received and for following-up with vendors and UMB Bank, as necessary.
2. Credits for items returned to vendors should always be posted to a cardholder's BPC account. Cardholders should never accept cash refunds or store credits for returned items.

504 Lost, Stolen or Compromised Accounts

Lost, stolen or compromised BPCs should be immediately reported to the agency BPC Coordinator and UMB Bank for cancellation. (Refer to paragraph 160 of this document.) Also immediately report any unexplained charges on the BPC statement to the agency BPC Coordinator and UMB Bank.

505 Account Maintenance

Agencies are responsible for performing periodic reviews of BPCs and communicating required changes to UMB Bank on a timely basis.

• BPCs that have been dormant for more than one year should be cancelled, if future usage is not anticipated. Cancellation of BPCs with less than three transactions per year is also strongly recommended, if usage is not anticipated.
• BPCs that have been dormant for more than one year should be deactivated (credit limit reduced to $1), if future usage is anticipated.
• Override strategies requested by agencies for specific BPCs should be immediately cancelled once the associated transactions have been processed.
• Transaction or billing cycle limits that are unnecessarily high should be lowered.
• The return of BPCs to the agency BPC Coordinator should be incorporated into the agency's exit interview process to ensure that "active" BPCs are cancelled and properly accounted for. In addition, transactions charged to BPCs in the billing periods directly preceding and following the cardholder’s termination date should be reviewed closely.
• Also, the Division of Accounts and Reports will review transaction limits, dormant and low usage BPCs, and BPCs with over-ride strategies on a periodic basis. The Division of Accounts and Reports will communicate desired changes to the respective agencies.

506 INTERNET SECURITY

Suggested best practices for shopping on the Internet are listed at the home page for the Business Procurement Card Program. Be aware that an outside party could gain access to your BPC account number if a vendor's Internet site is not secure. Also, never provide your personal information to a vendor (social security, bank account or personal phone numbers or your home address).

600 TRANSACTION DOCUMENTATION, REVIEW AND PAYMENT

Cardholders are responsible for obtaining receipt documents for all transactions, preparing transaction logs for each billing cycle and ensuring that transaction information per these documents is consistent with statements received from UMB Bank for the billing period.

610 Receipt Documents

Receipt documents are critical to the overall internal control of the State BPC program.

1. Itemized receipt documents, issued by vendors, supporting all transactions charged to the BPC during the month must be attached to the monthly BPC log and be filed in one location. Missing documentation is not indicative of a strong internal control environment.
2. Examples of receipt documents include charge receipts, invoices, packing slips, screen prints, etc.
3. If a receipt document cannot be obtained from a vendor, we recommend a note summarizing the transaction be prepared and retained. A note is also recommended if the only documentation provided is a credit card charge receipt, which does not include transaction details.
4. Receipt documents must contain a description of the items purchased that is sufficient to support the expenditure sub-object code used.
5. If a vendor provides a packing list, but not an invoice, write the missing information on the packing list. Also write "only receipt available" on the document.
6. Unit cost, quantity and total cost must be available on the BPC log or other supporting documentation.

620 BPC Logs

A BPC log must be prepared if items are purchased with the BPC during the month. The purpose of the BPC log is to provide a basis for the cardholder and agency to control and monitor BPC transactions.

1. The BPC log shall include columns to record the following information for each transaction: vendor name; order date; amount; description; expenditure sub-object code the transaction will be charged to; the statewide open-end contract number for items purchased from statewide contractors. Additional information can be included on the log, at the agency's discretion.
2. The amount of each BPC transaction shall be posted as a separate item on the BPC log. Posting the net amount of multiple transactions detracts from the log's usefulness as an internal control tool.
3. Always post disputed transactions to the BPC log. Care shall be taken to write necessary supporting notes on the BPC log regarding such transactions.

630 Special Codes Available for BPC

The expenditure sub-object codes listed below are available when coding purchases of commodities included on the monthly UMB billing. Use of these object codes is optional.

640 BPC Log Reconciliation

1. The BPC log shall be reconciled to supporting receipt documents and the associated monthly BPC cardholder statement received from UMB Bank, as soon as possible after the statement has been received.
2. Any differences between the BPC log and the UMB statement should be documented on the BPC log. Examples of such differences include partial shipments, damaged goods received, etc. Contact the vendor or UMB Bank to resolve disputed transactions and to obtain credits on future cardholder statements. Refer to Section 650 for guidance on processing purchases pending credit.
3. Also, agencies occasionally discover that the transaction amount on the UMB statement and the receipt document are different. An agency is not required to obtain credits for small dollar differences (under five dollars per transaction) between statement and receipt documents.
4. Special care should be taken when reconciling registration transactions. On occasion, vendors may not contact your agency when a registration transaction is rejected due to problems with the vendor's merchant category code. If a registration transaction has not been posted to the UMB statement on a timely basis, we recommend that your agency confirm the status of the transaction with the vendor.
5. The BPC cardholder shall sign and date the completed and reconciled BPC log (unless the Division of Accounts and Reports has approved an alternative procedure).
6. The supervisor / reviewer of the BPC Cardholder shall indicate his / her approval of the completed and reconciled BPC log by attaching his / her signature and date to the log (unless the Division of Accounts and Reports has approved an alternative procedure).

650 Processing of Purchases Pending Credit

1. Expenditure sub-object code 3999 (BPC Purchases Pending Credit) has been established to streamline the accounting for situations in which the agency is disputing a transaction(s) (i.e., the agency has filed a dispute form with UMB Bank) included on the UMB monthly billing and a credit memo has not been posted to the cardholder account during the same billing cycle in which the original purchase was made. Use of code 3999 is optional, but is encouraged if your agency does not have alternative procedures for tracking credits due from vendors.
   1. In the first month, charge disputed transactions to object code 3999 to indicate a "pending credit purchases" status.
   2. In month two, when credit is received for transactions disputed in month one, the amount charged using this object code in month one will be included on the payment voucher using transaction code (TC) 755 and object code 3999.
   3. Use separate transaction entries on the UMB payment voucher to record (1) credits received on the current month's UMB billing for prior month's disputed transactions and (2) disputed transactions on the current month's UMB billing.
   4. The net result of this procedure is that once a credit for a disputed transaction has been posted to STARS, offsetting debits and credits should both have been posted to object code 3999.
2. Credits received on the UMB statement shall be posted as separate items on the current month's BPC log. Never change the original BPC transaction amount on a prior month's BPC log when a credit is received. Instead, cross-reference credits received to the prior month's log on which the transaction was posted.

660 Payment of Monthly Billing from UMB Bank

1. Approved BPC logs, with supporting receipts and statements attached, shall be forwarded to the agency accounting staff for the payment of the agency's monthly BPC billing from UMB Bank.
2. Payment shall be made to UMB Bank for the total BPC billing amount, regardless of whether the agency is pursuing credits or charges are being disputed (unless the Division of Accounts and Reports has approved an alternative procedure). Credits for such items can be obtained on subsequent billings. Refer to paragraph 650 for additional guidance.
3. Vendor suffix "06" shall be used.
4. Agencies are strongly encouraged to use the ACH payment option.
   1. If the agency uses the ACH payment option and receives both BPC and Business Travel Account (BTA) billings from UMB Bank, it is important that payment of BPC and BTA billings not be processed on the same voucher.
   2. Also, be aware that multiple agency vouchers for UMB Bank processed in STARS on the same day may be automatically combined if STARS is set to do so.
   3. To ensure correct application of electronic payments, the last eight digits of the control account number shall be included in the first STARS funding line in the "invoice" field. The format of the invoice field shall be:

      BPC 12345678

      "12345678" represent the last eight digits of the BPC control account to which payment is posted.
5. The agency is responsible for contacting UMB Bank to resolve any past due balances or credit balances carried forward to the current billing from previous billings.

670 Fiscal Year Determination

All BPC transactions posted to cardholder accounts on the BPC statement(s) received from UMB Bank in the month of June are considered to be old Fiscal Year transactions. Transactions not included on the June BPC statement (for the period beginning after the June statement cut-off date and ending on June 30) can be charged to the old or new Fiscal Year, at the agency's option. This is an opportunity to reduce the number of encumbrances required at year-end. If a listing of BPC transaction activity between the June BPC statement cut-off date and June 30 would be helpful, the agency BPC coordinator can contact UMB Bank and make arrangements for delivery of this information.

680 Retention of BPC Records

Itemized receipt documents, BPC logs, and UMB statements (for each BPC card account) shall be maintained in accordance with the Public Records Preservation Act (K.S.A. 45-401 et seq.).

690 Central Clearing Fund Reconciliation

If your agency pays the UMB monthly billing from a central clearing fund for agency-wide BPC transactions and is subsequently reimbursed by individual agency departments, it is critical that your agency maintain a reconciliation schedule with which to track reimbursement amounts due to the central clearing fund from individual departments. Central Clearing Fund Reconciliation Schedules shall be maintained in accordance with the Public Records Preservation Act (K.S.A 45-401 et seq).

700 Electronic Reconciliation System

As BPC programs expand, agencies are encouraged to take advantage of the VISA Information Management tool, including electronic reconciliation. Utilization of electronic reconciliation allows an agency to reconcile and fund transactions on a daily basis rather than at the end of the billing cycle, eliminates the need for cardholders to prepare separate BPC logs and also extracts data for upload into the agency’s accounting system or STARS. Utilization of electronic reconciliation can significantly increase the efficiency of your agency’s BPC process.

Please contact UMB Bank if you would like to obtain more detailed information about the electronic reconciliation process.

800 Online Card Maintenance System

A.    UMB Bank has made an online card maintenance system available to all agencies.  With access to this optional system, agency BPC coordinators can electronically update transaction limits, put temporary override strategies in place, set up new accounts, order replacement cards, change card strategies, give accounts an inactive status, and close accounts.  Use of the online card maintenance system can significantly increase your agency’s ability to respond to the needs of cardholders in a timely manner, especially during non-business hours.

BPC coordinators are encouraged to take advantage of this opportunity to more fully manage their agencies’ BPC programs.  If your agency would like to take advantage of the online card maintenance system, please contact UMB Bank and complete a user access form that the Bank will provide.  The BPC Coordinator will coordinate access to the system for their agency and should sign the user access form as program administrator.

B.    Standard strategies for the Statewide BPC program are included on the Kansas BPC Program – Standard Strategies Schedule, which is available upon request from the Division of Accounts and Reports. 

• Strategies allow an agency to define a BPC’s transaction limit and valid vendor types, based on Merchant Category Codes (MCCs) for a BPC.
• Temporary over-ride strategies may be utilized by an agency for certain transactions, as defined in Section 340 of the Business Procurement Card General Procedures. When selecting an override strategy, the agency should select the most restrictive override strategy that will allow a specific transaction to process.
• Certain vendors (or specific credit card terminals) have been hardcoded into certain strategies (for example, specific contract vendors have been coded into the strategy used for cardless contract accounts.)

Page last modified on:  February 24, 2009