P-Card Spring Training Fair Territory

1. P-Card Spring TrainingFair Territory JIM DANIELS & MIKE KINGERY FINANCIAL SERVICES FINANCIAL CONTROLS

2. FY 2013 PCard reviews at ASU How did it go? The most common issues we find with PCard reviews are: Inadequate business purpose to assure an outside party of the appropriateness and/or necessity for the transaction. Lack of public purpose served. Also noted was the failure to complete the secondary review timely (prior to the last day of the subsequent month). Past PCard Results:

3. FIN 119-Public Purpose Served In order to fulfill ASU’s fiduciary requirements, Financial Services requires that the public purpose be clearly documented on each payment transaction. Each document processed must have public purpose documented, unless it is readily apparent by the nature of the item. (Each financial transaction should be able to stand alone during an audit, or contain the correct references. Appropriate documentation is essential.)

4. Example 1: Public Purpose Served A PCard payment having attached to it a Business Meals, Food and Related Expense Form noting the purpose of the expenditure as being “met to discuss university business.” Is this an adequate explanation for the public purpose served? No. There is insufficient information for an independent party to make an initial judgment on how the university benefited from the expenditure of public funds. The actual benefit to the university (e.g., potential donation, or counsel from prominent community leader on XYZ program) needs to be noted.

5. Example 2: Public Purpose Served Example: A PCard payment having attached to it a SouthWest Airlines ticket with the notation “attending a conference” or “attending a meeting”. Is this an adequate explanation for the public purpose served? No. There is insufficient information for an independent party (e.g., outside auditor) to make an initial judgment on whether a public purpose is being served since the conference being attended is not indicated. For example, attendance at a conference on current veterinary medicine issues by a professor of veterinary medicine would meet the test of public purpose served; attendance by the same employee (whose current and prospective employment responsibilities are in the veterinary medicine area) at a conference on political causes would not meet the public purpose test. The specific conference or meeting being attended needs to be indicated and acronyms should be avoided unless previously defined in the narrative.

6. Example 3: Public Purpose Served Example: A PCard transaction with a receipt from Dell for a desktop computer with the notation “new computer”. Is this an adequate explanation for the public purpose served? No. There is insufficient information for an independent party to make an initial judgment on how the university benefited from the expenditure of public funds. The actual benefit to the university (e.g., new computer for Professor Smith with improved processing speed to increase research productivity on NIH sponsored project ABC123) needs to be noted.

7. Timely Reviews A thorough and timelyindependent secondary review of PCard transactions is the single most important control in running an effective purchasing card program, helping to quickly detect errors and potentially fraudulent charges. Financial Services also encourages the purchasing card group to continue to strongly promote utilization of JPMorgan’s PaymentNet system for cardholders and/or secondary reviewers as a tool for review and proper expenditure coding.

8. FIN 401-02: Provost/Vice Provost/Vice President Approvals Certain transactions require approval of the provost, vice provost (VP), or vice president (VP) responsible for the agency/org. Each provost, vice provost, or vice president may select designees at the business operations manager level or higher who may also approve the transactions. Business Cards purchased in a non-ASU standard format. Parking permits for emeriti faculty. (Only local funds may be used.) Out-of-State Travel Authorizations. Holiday Celebrations. (Only gift or other discretionary account may be used) Live Plant Purchases. Employee nonmonetary awards exceeding $100 per person. Employee reimbursements greater than $1,000. Financial Services discretionary. Interdepartmental loans. Warehouse club memberships purchases (Costco, Sam’s Club).

9. FIN 401-03: Prohibited Transactions Include: Use of 12 or 15 Passenger Vans Alcoholic Beverages Direct Vendor Billings > $5,000 when PO is required Fines and Penalties Flowers, unless for official University event - limited Gifts, Contributions, Donations, Advances, or Loans Graduation Caps and Gowns Legal Fees, unless approved by General Counsel’s Office Internet Reimbursements Parking Decals for employees/ students Payments Benefiting External Organizations with no direct benefit to ASU Postage Stamps Prepayments – form for exceptions Purchases from ASU Individuals Refunds to Donors Transfers of ASU revenues to off-campus bank accts or other organizations. University Club Dues Vendor Invoices > Two Fiscal Years

10. PCard PROHIBITED transactions Any Tuition Payment to ASU Alcoholic Beverages for any purpose ASU Foundation Payments (other than conference registration and other payments where services were rendered by the ASU Foundation.) ASU Sun Card Payments Animals, Live (Contact Animal Care-480-965-5784) Bottled water (unless with a P-Card ties to a local account) Car Rentals (while on travel status) Cash Advances Construction Related Activities (includes any remodeling) Copiers (Contact Digital Document Services 480-965-9833) Employee Moving Expenses (Except direct payments to contracted moving companies.) Fines, Penalties, and Late Fees Firearms, Ammunition, and Explosives Floor Coverings (Contact Furnishing Services 480-965-5378)

11. PCARD PROHIBITED TRANSACTIONS Flowers (Must follow FIN 401-03 Policy) Food (Food can only be purchased on a P-Card ties to a Local Account.) Itemized receipts are required. Reference FIN Manual 420-02 Furniture (Except from ASU contracted suppliers.) Fuel for University Vehicles Gasses (except helium from non compressed gas suppliers, contact gas services 480-965-6546) Gifts, Contributions and Donations Gift Cards Hotels & Lodging (while ASU affiliate is in travel status) Internet (charges incurred at a non-university residence or office space) Transactions > $25,000 (requires specific approval by Purchasing and Financial Services) Legal Fees (contact General Counsel 480-965-4550) Loans & Advances Materials Prohibited by State or Federal Law (fireworks or controlled substances) Medical, Health-Related Services (unless required by ASU, such as immunizations for certain workers)

12. Pcard PROHIBITED TRANSACTIONS Narcotics & all drugs Paint (for any construction purpose) Personal Purchases Postage (must be purchased through Mail Services) Print Work > $5,000 (without advance Print Buyer approval. Contact Kevin Hall 480-965-8049) Printing of Merchandise (with the ASU logo without approval from Trademark Management) Printing of Anything with the ASU Logo or Word Mark, excluding Merchandise Printing of Department Letterhead, Business Cards, Envelopes and other ASU Stationery (except through the ASU Print & Imaging Lab at 480-727-1636) Purchases from ASU Employees Purchases in which ASU Employee has a Conflict of Interest and that Employee Participates in the Purchase Process

13. Pcard PROHIBITED TRANSACTIONS Radioactive Materials Rare & Precious Metals Services from an Individual or Non-Incorporated Company Splitting Purchases to Circumvent the Card Limits (email pcard@asu.edu for temporary P-Card increase) Travel Expenses for Employees Not Allowed-Lodging & Food associated with employee travel. Allowed Expense on P-Card-Airfare for employees (in travel status), interviewees and consultants may be paid with the Purchasing Card. Allowed Expense on P-Card-Lodging in the metropolitan Phoenix area for interviewees, consultants as agreed via contract, and other non-employees. Allowed Expense on P-Card-Lodging and Food Purchases (food on local account only) UPS Store Purchases (UPS Store is different from UPS Shipping) Window Covering (contact Furnishing Services 480-965-5378)

14. Prohibited Items found in Past Pcard Reviews Late Fee Print Job >$5,000 Gift Cards Service (To an individual) Donation Split Transactions Furniture UPS Store Parking Ticket No Itemized Receipt Postage No Receipts Alcohol Personal Purchase (Reimbursed) Travel Status Fuel Gasses (Nitrogen) Gift Card Meal Over $40/PP Tip > 20 % Rare Coins (Precious Metals)

15. What can go wrong??? Nov. 30, 2012: A former Oklahoma State University employee who used her school-issued credit card to buy $80,000 worth of sex toys, electronics and other personal items will serve two years in state prison, court records show. * Nov. 30, 2012: Former Brookdale Community College president Peter Burnham was sentenced to five years in prison today for official misconduct and theft, completing the dramatic fall of one of the state's top higher education leaders. * Oct. 27, 2012: Two San Mateo County Community College District employees have been arrested for allegedly buying computer equipment and software with district money and reselling them for profit, according to the San Mateo County District Attorney's Office. * Mar. 16, 2009: Former Georgia Tech employee sentenced to ten years in prison for PCard thefts. Stole over $170,000 over a four year period. May 22, 2008: Former Georgia Tech employee sentenced to 2.75 years in prison for PCard thefts. Stole over $316,000 over a five year period. *Reference: Fraud cases from “Case in Point: Lessons for the pro-active manager 2012

16. PCard frauds at ASU! Air Conditioner Repair – terminated, repaid IT Purchases – making way through legal system Amazon (crime & romance novels) – terminated, repaid Doctored Receipts – terminated, prosecuted, $75K restitution Voyager Card – multiple employees terminated

17. We are here to help! If you have a process/procedure that you would like assistance with, please contact Financial Controls. (Financial Controls – 480-965-6988) ASU Ethics & Compliance Hotline 1-877-SUN-DEV FIN 129 – Ensuring Financial Integrity Questions? Thank you!