Section 1 – Purpose and Eligibility Requirements
The Procurement Card (P-Card) is a corporate card issued on behalf of USC by a bank (Issuing Bank). The P-Card is used for buying goods and services for the university. Use of the P-Card eliminates the need for more cumbersome advances, check requests, petty cash, requisitions/purchase orders and is the payment method preferred by many suppliers. Because the P-Card is a corporate liability card and not a personal liability card, cardholders may not list the P-Card as a line of personal credit on any personal credit application or credit check.
P-Card eligibility is based on a departmentally-determined business need and is contingent upon receiving the required application approvals.
The P-Card is intended for use only by USC employees on active payroll status. At the department’s discretion, and with the approvals identified herein, a P-Card can be issued to a student, provided the student is on university payroll (i.e., teaching assistant, research assistant, etc.). Issuing P-Cards to students should be done only when essential on a very limited basis. The P-Card may not be issued to non-employees.
Information regarding the application process and associated cardholder agreements are available on the USC Business Services Corporate Cards website.
Section 2 – Card Renewals, Suspension, and Cancellation
2.1 Renewal cards and training
P-Cards expire every three years; online training is mandatory for each card renewal. Corporate Card Services will notify the cardholder via email when it is time to complete the renewal training. It is the cardholder’s responsibility to complete all required training prior to the card’s expiration date. Replacement cards are issued one month prior to the card expiration date. If training is not completed, the corporate card will be suspended.
The Issuing Bank may choose not to renew a P-Card if it shows no transaction activity for eighteen consecutive months, or if the university has found evidence of improper use.
2.2 Card cancellation/suspension
A P-Card can be cancelled at any time by the Issuing Bank, USC, or the cardholder. The Issuing Bank may cancel a card if there has been no transaction activity for eighteen consecutive months. Senior Business Officer (SBOs) are responsible for ensuring P-Cards are canceled when an employee: a) terminates employment with the university; b) transfers to a different department; or c) misuses the P-Card and/or violates university policy (see Section 5 Manager and SBO responsibilities), so that the Corporate Card Services can cancel the employee’s P-Card(s). Cardholders transferring departments must reapply for a P-Card within their new department. Cardholders may cancel any card in their name at any time.
Because the P-Card is an inventoried item on USC’s employee inventory form, card cancellation should be requested on the Corporate Card Changes request form available in the university’s financial system. The P-Card should be returned to one of the following university representatives:
- Home Department Coordinator;
- Cardholder’s manager; or
- Corporate Card Services.
Cardholders, managers, or SBOs must notify Corporate Card Services via the Corporate Card Changes request form when a cardholder goes on extended university leave (i.e., sabbatical or family leave), so that P-Cards can be suspended until his/her return to work. USC will also suspend a P-Card if the cardholder is under investigation for misuse of the P-Card.
2.3 Reactivating suspended cards
Cardholders, managers, or SBOs can request to reactivate a P-Card suspended during extended leave via the Corporate Card Changes request form. A P-Card suspended for misuse may be reopened only after Corporate Card Services has determined the cardholder’s eligibility for continued use of the P-Card.
Section 3 – Proper Use and Policy Compliance
3.1 Proper use
Cardholders may only use the P-Card for university business transactions. Partial business and personal transactions are not permitted. The P-Card may not be used for travel-related purchases. The corporate travel card should be used for university travel- and event-related purchases.
In addition to this P-Card policy, all P-Card transactions must comply with the university’s policies and procedures governing Expenditures and Purchases. Cardholders who allocate expenses to a sponsored project account must also comply with their respective sponsoring agency’s policies. Cardholders who do not comply with university policies and procedures may have their USC cardholder privileges revoked.
The university’s policy on Misappropriation of University Assets is applicable with respect to use of the P- Card. Misuse of the P-Card may result in disciplinary action, up to and including termination of employment.
The table below outlines the levels of P-Card use for purchasing goods and services.
|Single transaction amount||Use of P-Card|
|Less than $500||Expected|
|More than $500 and less than $5000 (including tax and delivery)||Strongly recommended|
|$5000 or more||Not allowed|
The following list provides examples of appropriate business transactions for the P-Card.
- Appliances, hardware, and electronics
- Associations and organizations
- Bakeries and grocery stores
- Books and periodicals
- Business, trade, and vocational schools
- Camera and photography supplies
- Caterers (G/U) (Section 6.4)
- Cell phone/internet service
- Conference registration
- Copy and reproduction
- Computers (hardware and software)
- Department stores
- Equipment repair
- Florists and nurseries (G/U)
- Government agencies
- Lab supplies (medical, dental and hospital)
- Laundry (lab coats, hospital linen and uniforms)
- Office supplies (incl. coffee service)
- Overnight courier service
- Paints and art supplies
- Schools, colleges, and universities
- Sporting goods
- Uniforms (purchase, rental and cleaning)
- Wholesale clubs
Examples noted as “(G/U)” are typically government unallowable and may not be charged or reallocated to a sponsored project account.
The corporate travel card is the preferred form of payment for caterers and restaurants. However, the P-Card may be used for charges to caterers and restaurants where the food and beverages are delivered to a business-related event held on campus with SBO approval prior to the event. Cardholders may not use the P-Card for individual meals or for meals at restaurants, hotels, or other food-related establishments.
3.2 Card restrictions
The following restrictions apply to the P-Card.
- Personal use: Cardholders may use the P-Card for university business transactions only. Partial business and personal transactions are not permitted.
- Travel and events: The P-Card may not be used for travel-related purchases. The corporate travel card should be used for these purchases.
- Promotional and print: When the P-Card is used to purchase promotional items or printed materials that bear the university’s name, logo, or seal, the purchase must be made in compliance with policies governing proper use of the university’s trademarks.
3.3 Expenditure policies compliance
All P-Card transactions must comply with the university’s Expenditure policies and procedures. For example, transactions for gifts, catered meals, office decorations, etc., may not exceed the university’s maximum rates.
3.4 Sponsored project policies compliance
Expenses allocated to a sponsored project account must comply with the sponsoring agency’s policies. For example, federal and state sponsored-project funded accounts beginning with 5 restrict the purchase of gifts, alcohol, flowers, and decorations.
Cardholders should direct questions regarding allowability to the department of Contracts and Grants before incurring the expense. If an unrestricted P-Card account is used for government unallowable purchases, Financial Analysis may contact the department to identify unallowable amounts for the purpose of calculating the university’s indirect costs.
3.5 Purchasing policies compliance
All P-Card transactions must comply with the university’s Procurement policies. For example, cardholders are not authorized to sign procurement agreements, contracts, etc., regardless of the dollar amount or method of payment. Cardholders should contact Procurement Services to obtain a signature for any procurement agreement.
Additionally, some suppliers are required to have specific types of industry licenses and insurance coverage, depending upon the nature of their services. Cardholders are responsible for ensuring that suppliers performing work for the university have the required licenses and insurances.
3.6 Card limits
The P-Card has two limits: a billing cycle credit limit and a single purchase limit. The SBO determines these two limits on the P-Card application.
The credit limit determines the maximum amount that can be spent during each monthly billing cycle. Since university policy does not identify a maximum billing cycle credit limit, this limit is determined by the division’s SBO.
Since purchases over $5,000 may be defined as equipment and therefore require bidding per university policy, the maximum single purchase limit is $5,000, including tax and delivery. Information about equipment is provided by Equipment Management.
Attempting to circumvent the established single purchase limit by splitting transactions is not allowed and may result in deactivation of P-Cards and further disciplinary action.
After P-Card issuance, SBOs can request card limit changes on the Corporate Card Changes request form available in the university’s financial system.
3.7 Merchant Category Code (MCC) restrictions
In addition to card limits, the P-Card is subject to certain Merchant Category Code (MCC) restrictions imposed by USC to reduce the potential for misuse and fraud. For example, transactions for gambling establishments, jewelry stores, and other types of merchants unlikely to provide goods or services with a legitimate business purpose, will not be authorized at point of sale.
Section 4 – Additional Cardholder Responsibilities
4.1 Authorized card users
The cardholder whose name appears on the P-Card is the only individual authorized to use the card. Per USC’s agreement with the Issuing Bank, lending or sharing of P-Cards is not allowed. Cardholders are expected to keep their P-Cards in a secure location at all times.
Cardholders are responsible for maintaining a current billing address, phone number, and email address online via the Issuing Bank’s portal.
4.2 Avoiding duplicate claims
Cardholders may not submit duplicate claims for expenses charged to a P-Card, and may not seek a claim for expenses charged to a P-Card from any other source.
4.3 Transaction disputes
Cardholders must dispute any questionable charge appearing on their monthly electronic card statement with the Issuing Bank within sixty days of the transaction post date.
The Issuing Bank will provide the cardholder with a fraud affidavit form to complete and once returned the fraud investigation will begin. If the dispute is resolved in the cardholder’s favor, the Issuing Bank will credit the transaction and it will remain permanently on the electronic statement. If the Issuing Bank determines that the transaction is a legitimate charge, the Issuing Bank will inform the cardholder and it becomes the cardholder’s responsibility to settle the expense.
4.4 Lost stolen or fraudulent charges
Cardholders must immediately contact the Issuing Bank’s customer service line if a P-Card is lost or stolen, or fraudulent activity is detected. Cardholders may be held financially responsible for transactions if fraud is not promptly reported.
4.5 Declined transactions
Common reasons for declined transactions include the following:
- Merchant has incorrect P-Card expiration date;
- The cardholder’s electronic statement billing address does not match the billing address provided to the merchant;
- The transaction amount exceeds the card’s allowable limit; and/or the cardholder is attempting to use the P-Card with a high-risk merchant.
If a cardholder is unclear as to why a P-Card transaction is declined, the cardholder may contact either the Issuing Bank or Corporate Card Services for more information.
4.6 Cardholder cooperation during audits
The cardholder agreement states that the university has the authority to access transactions posted to the cardholder’s account and/or to obtain supporting documentation directly from a merchant/supplier. By signing the Procurement Cardholder Agreement, cardholders agree to cooperate with university officials, and provide any additional information and/or documents requested by auditors.
Section 5 – Manager and Senior Business Officer Responsibilities
5.1 Manager responsibilities
The manager of the cardholder has the following responsibilities:
- Ensure that all subordinate cardholders are uploading acceptable and legible business purposes and receipts
- Electronically approve all subordinate cardholders’ electronic card statements through the university’s financial system
- Managers who have not provided adequate oversight of purchases may be subject to disciplinary action.
5.2 Senior Business Officer responsibilities
It is the responsibility of the SBO to oversee the P-Card program at the department/unit level. This Procurement Card policy is intended to facilitate the SBO’s responsibilities. With respect to departmental cardholders, SBO responsibilities include:
- Establish and monitor department-level procedures to ensure expenses charged to departmental accounts comply with departmental procedures and the university’s Expenditure policies;
- Report SBO changes to Corporate Card Services;
- Approve or reject online P-Card applications;
- Review Missing Receipt Declarations (MRDs);
- Approve changes to spending limit and USC account number subsequent to the application process;
- Report a cardholder’s termination/departure from the university or department to Corporate Card Services.
SBOs who do not provide adequate oversight of purchases may be subject to disciplinary action.
5.3 Senior Business Officer cooperation during audits
All cardholders are subject to audit. As part of the audit process, an auditor may contact the SBO (or designee) and/or cardholder. SBOs (or designees) are expected to assist in all audits and investigations.
5.4 ASR review
SBOs (or designees) should ensure that university Accounts Status Reports (ASRs) are carefully reviewed both for reconciliation to P-Card receipts and for authorized use of the P-Card. SBOs may also obtain web access to the Issuing Bank’s portal to review departmental cardholder transactions by contacting Corporate Card Services.
Section 6 – Processing Statements
6.1 Submitting monthly electronic statements
Cardholders are responsible for retaining the receipts for their P-Card purchases and processing their monthly electronic card statements in the university’s financial system. Each P-Card is assigned a single USC account number and object code in the application process. Departments can reallocate transactions from the USC account number associated with the P-Card to another account or to multiple USC account numbers via the reallocation process.
After the monthly electronic statements are uploaded to cardholders’ personal accounts in the university’s financial system, cardholders are expected to perform the following:
- Review statement transactions, and verify all charges as accurate and legitimate
- Attach legible receipts for all transactions
- Enter a business purpose for each transaction
- Confirm that legible attachments have been uploaded successfully
- Electronically approve the electronic statement
- Ensure that the electronic statement is approved by the supervisor or SBO (i.e., “reviewer”)
- Detailed information can be found on the Corporate Cards website.
All P-Card charges appear in the transaction detail of the Account Status Report (ASR) as journal type PCDO (Procurement Card Reallocation). It may take up to thirty days between the date of purchase and ASR posting. Upon unauthorized account overdraft or account expiration, P-Card charges will be allocated to the applicable dean’s or senior vice president’s account. P-Cards may be subject to cancellation if account overdraft or expiration becomes routine.
6.2 Billing cycle
The P-Card billing cycle ends on the tenth of each month. This end date may vary slightly if the tenth falls on a weekend or holiday.
There are two separate five business-day reallocation periods each month as designated on the Comptroller’s website. Authorized individuals can reallocate P-Card charges through the university’s financial system. Role access to the reallocation process is obtained through the User Access Request Document.
Charges that are not reallocated in the general ledger or charges that have already posted to the ASR can be moved via a Journal Voucher entry process. P-Card charges can be reallocated only within object code 15XXX.
6.4 Receipt requirements
In accordance with the university’s Expenditure policies and procedures, all P-Card transactions must be supported by a receipt, regardless of amount and source of funds. All receipts require sufficient information to support the transaction. At a minimum, receipts should provide the following content:
- Name of merchant
- Amount of charge
- Transaction details (what was purchased)
- Transaction date
- Tax and delivery charges
- Evidence of card used (i.e. displays last four digits of card number)
Original receipts are preferred. However, the Expenditure policies and procedures specify acceptable alternatives to an original receipt. A P-Card electronic statement is not considered a receipt.
6.5 Missing receipts
When a receipt cannot be obtained or has been lost and all measures to obtain a copy or fax of the receipt (or other acceptable alternative), have been exhausted, the cardholder must submit a Missing Receipt Declaration (MRD) with the electronic statement. The MRD requires an explanation of why the receipt is missing and a business purpose for the expense. Each expense for which a receipt is missing must be itemized on a separate MRD. Do not bundle multiple expenses that are missing receipts onto a single MRD. The MRD must be reviewed and electronically approved by the SBO. The MRD must be attached and submitted with the P-Card electronic statement.
6.6 Business purpose requirements
Each P-Card transaction must be supported by a business purpose in the electronic statement. A clear business purpose answers the following questions: who benefits from the transaction, where the purchased item is located (if applicable), and why the transaction was necessary. When the type of transaction may inherently imply a business purpose (e.g., toner, paper, pens, letterhead, lab supplies etc.), it is still necessary to provide a business purpose that describes for which location or project within the department the merchandise was purchased. For some sponsored-project accounts, purchases are allowed only if they are solely used for the specific project attached to that account.
6.7 Document retention
Once approved, the electronic statement is stored in the university’s data storage network for a minimum of four years. If a P-Card is linked to a sponsored project account, P-Card electronic statements will be maintained for four years after final payment or completion of a project audit if started prior to the expiration of the four-year period.
6.8 Contract or grant expiration
P-Card orders placed within thirty days of a contract or grant’s termination must be made with the understanding that the goods and services will be received before the contract or grant’s budget period end date, and that the goods and services will directly benefit the project. To facilitate compliance with this policy, P-Cards associated with a sponsored project account may be closed thirty days before the contract or grant’s expiration date. If the contract or grant is extended, the SBO must submit a Corporate Card Changes request form requesting the P-Card be reopened with the new expiration date.
6.9 Overdrawn, frozen or closed account numbers
P-Cards associated with USC account numbers that have insufficient funds will be paid in full by the university and will automatically debit/overdraft the USC account.
P-Cards associated with USC account numbers that are either frozen or closed will be paid in full by the university. However, a representative from Corporate Card Services will contact the cardholder and request a USC account number correction so that charges can be debited. If an alternative USC account number is not provided within five business days of contact, the charges will be allocated to the applicable dean’s or senior vice president’s account. P-Cards associated with USC account numbers that are routinely frozen or closed may be cancelled.
6.10 Sales tax
Since the university is not sales tax exempt, the state Board of Equalization requires the university to pay California sales/use tax on all taxable transactions (i.e., tangible, non-edible items), including transactions incurred with non-California merchants. To confirm that sales tax was included in a P-Card transaction (or why it was not included), Corporate Card Services may ask the cardholder to provide receipts and/or an explanation for verification. For P-Card transactions that should have been charged California sales/use tax at point-of-sale, Corporate Card Services will accrue sales/use tax using the USC account number associated with the applicable P-Card.
Additional information about sales tax is available on the Corporate Card Services website.
Section 7 – Liability, Misuse and Audits
7.1 Institutional liability
The P-Card is an institutional-liability corporate card. This means that the university pays the cardholder’s monthly P-Card statement in full directly to the Issuing Bank. The cardholder does not remit payment to the Issuing Bank and does not process an expense report. However, cardholders are responsible for processing their monthly electronic statements in the university’s financial system.
7.2 P-Card misuse
Cardholders who do not comply with all university policies and procedures, including the Misappropriation of University Assets policy, may have their cardholder privileges revoked. Revocation may be extended to all corporate cards in the cardholder’s name, including the corporate travel card, and continued misuse of the P-Card may result in disciplinary action, up to and including termination of employment.
7.3 Audit Services and University Hotline
University employees must report known or suspected misappropriations, regardless of magnitude, to their immediate manager, department chair or dean.
Managers, department chairs or deans must then inform Audit Services (213-740-8258).
Individuals wishing to report suspected incidents on an anonymous basis may call the Office of Compliance Help and Hotline (213-740-2500).
Travel Management and Corporate Card Services
James M. Staten, Senior Vice President, Finance and Chief Financial Officer
University of Southern California