Purchasing Card Policy
For questions or training regarding the Hospital Purchasing Card Program, please contact Betty Wilson, Hospital Purchasing Coordinator at 884-9303.
Table of Contents
Program Overview
- Objective
- Policy
- General Information
- Conflict Of Interest
- Expert Approvals Required in Advance of Purchasing
Procedure
Purchasing Card Limits and Controls
- Purchasing Card Limits and Spending Controls
- Controls on Amount of Transactions
- Standardized Single and Monthly $ Limits
- Temporary Increase Restrictions
Review and Approval of Purchasing Card Transactions
Purchasing Card Cancellation
Program Overview
OBJECTIVE
Purchasing card provides administrative efficiency in the purchasing and payment process without compromising control.
POLICY
The use of the purchasing card by a cardholder in lieu of purchase orders is acceptable but requires authorization from both Management and the Purchasing Department. Purchasing via the cards does not apply to all items. The process of obtaining approval to purchase items is still applicable to purchasing card transactions. The purchasing card is only a method of payment.
GENERAL INFORMATION
All purchases must be made in accordance with UM Purchasing Policies, UM Business Policy Manual (BPM), and University Hospitals and Clinics Policies and Procedures. Delegation of purchasing to departments is a privilege, which can be revoked by the Purchasing Department. Personal purchases and misuse of University funds is prohibited. Violation of purchasing policies can result in personal liability for repayment, employment disciplinary action and/or criminal penalties.
CONFLICT OF INTEREST
As with any other purchase made for the University, a cardholder shall not purchase goods or services from a member of their immediate family or realize personal gain in any form that will influence the proper performance of University duties. The cardholder shall inform their supervisors in writing of reasonable foreseen potential conflicts.(See UMHC Conflict of Interest Policy, CC-4)
EXPERT APPROVALS REQUIRED IN ADVANCE OF PURCHASING
Departmental orders using a purchasing card are subject to advance approval by department management, and department procurement personnel are responsible for compliance.
Procedure
ALLOWABLE PURCHASES
The purchasing card can be utilized to purchase goods and/or services, if the value of the individual items is less than $2,500. See the Purchasing and Payment Quick Reference Guide, PP-2, for more information regarding the categories of goods and/or services listed below, or contact Purchasing, Contracts Administration or Accounting.
- Advertising – Newspaper, Radio, Television – less than $2,500
- Books, Publications, Newspaper Subscriptions – less than $2,500
- Commercial Wireless Telephone charges from a University Contracted Vendor
- Copies and Non–Stock Forms
- Dues for Individual Organizational Memberships or Certifications
- Equipment – Non-Capital – Office and Other – less than $2,500 (NON-Clinical)
- Express Mail Services
- Gift Shops – Specialty items for Resale
- Meals purchased from outside vendors – total purchase is less than $500 (must have UMHC business purpose and be made in accordance with BPM-505 Allowable Expenses)
- Postage – for outlying clinics and occasional mailings
- Utilities, Phone, Cable TV – off campus – less than $2,500
- Registration Fees for Conferences, Meetings, Trainings
Exception to $2,500 limit:
Equipment Repairs and Repair Parts - $4,999 or Less - Certain employees in Plant Engineering, Clinical Engineering, Clinic Administration (buyers) and Purchasing (buyers), as approved by management, are authorized to purchase repair services, parts, supplies, etc. for the purpose of repairing and maintaining existing equipment. For these departments, the purchasing card can be used to purchase items/services with a per unit value of up to $4,999
PURCHASES REQUIRING TERMS AND CONDITIONS: If a purchase requires terms and conditions or a contract to be signed, the item can not be purchased by using the purchasing card.
Restricted Items - Items/services not shown in the listing above are restricted from being purchased with a purchasing card, regardless of the dollar amount. To make a purchase for items not listed above, please consult the Purchasing and Payment Quick Reference Guide or contact the Purchasing Department.
Stringing Orders – The purchasing card can not be used for stringing orders. This would entail placing regular time interval purchases for the same item or like items, in order to keep the total order under the required $2,500 limit.
Splitting Orders – The purchasing card cannot be used for splitting orders. This would entail deliberately placing an order under $2,500 and repeating a similar order on another day in order to circumvent the $2,500 per item spending limit.
Purchasing Card Limits and Controls
PURCHASING CARD LIMITS AND SPENDING CONTROLS: Generally, a maximum of two cards are allowed per department.
CONTROLS ON AMOUNT OF TRANSACTIONS – Each cardholder will have controls and restrictions listed below:
- Single Purchase Limit $ (default is $500)
- Billing Cycle (30 day) Spending Limit $ (default is $2,500)
STANDARDIZED SINGLE AND MONTHLY $ LIMITS – The Department Manager will request the limitations for the purchasing card holder. The limits will be proposed by the Approving Official and approved by the Purchasing Department. The following standardized dollar limits will be determined during the purchasing card application process.
| Single Purchase $ Limit | Billing Cycle (30 day) $ Limit |
| $ 500 | $ 2,500 |
| $1,000 | $ 5,000 |
| $1,500 | $ 10,000 |
| $2,499 | $ 50,000 |
| $4,999 | $130,000 |
TEMPORARY INCREASE RESTRICTIONS – Increases to the above limits may be allowed as management determines appropriate based on spending needs of a department. Primarily these increases will be emergent needs, although permanent increases may be granted if the departments spending practices warrant a deviation from the standard policy. These changes may be made at the discretion of management but must be approved by the appropriate delegate of authority as presented below:
- Increase up to $1,000, would be approved by Purchasing Department. Alternate approver is the MUHC Controller.
- Increase greater than $1,000 would be approved by the MUHC Controller. The Chief Operating Officer is the alternate approver.
REVIEW AND APPROVAL OF PURCHASING CARD TRANSACTIONS:
Department Manager and Cardholder – Cardholder must agree to reconcile on-line transactions no later than the 2nd to last day of each month. Department manager must approve cardholder’s transactions and forward to Accounting by the 10th of the following month. For additional information regarding the reconciliation procedures, please contact the Purchasing Department. (Refer to billing cycle reconciliation dates manual) NOTE: As approvers of delegate’s purchases, Managers and Assistant Managers cannot have a purchasing card issued in their name.
Accounting and Purchasing – Will audit cardholder statements for appropriate purchases, match receipts to transactions and verify signature prior to making final reconciliation with central bill.
PURCHASING CARD CANCELLATION
Department Manager – The department manager must:
- Promptly notify the Purchasing Department when:
- Cardholder terminates employment with University;
- Transfers within University;
- Duties change within same department / position to extent purchasing is no longer a part of job.
- Return the purchasing card to the Purchasing Department within 48 hours of termination/employment change. Purchasing cards sent through campus mail should be cut up before being sent.
HR / Personnel - Send report of terminated employees to the Purchasing Department each month.
Purchasing Department – Upon notification of termination, the Purchasing Department will
- Cancel the individual cardholder’s account
- Destroy card upon receipt of card from the department
Key Content Expert: Manager, Hospital Purchasing and MUHC Controller
Reviewed 2019-08-05