Purchase CardProcedures

Edition dated: February 2018

Contents:

Foreword

Section 1.0 Introduction and SCC Low Value Procurement Strategy

Section 2.0 Administrative procedures

2.1 Application process2.2 Misuse2.3 Theft or Loss of Cards and Replacement Cards2.4 Security2.5 Return of cards / Leavers2.6 Purchase card roles

Section 3.0 The Purchasing Procedures

3.1 Common procedures3.2 Purchasing by telephone3.3 Purchasing in person3.4 Internet purchasing

Section 4.0 VAT

Section 5.0 Recording Purchases and reconciliation to Nat West statements

Section 6.0 Procedures in schools

Section 7.0 Accounting Protocols

Appendices 1 Employee Undertaking2 Monthly Purchase Card Transaction Log

Foreword

The Purchase Card Scheme is a development for Somerset County Council that uses modern tools to make day-to-day purchases easier.

The scheme provides an excellent opportunity for making savings in both time and money and also purchasing from online sites. Following the procedures and guidance contained in this handbook will help make the scheme a success for both the purchasing unit and SCC.

For all queries about the scheme, please contact:

Scheme Administrators AddressAndrew Paterson : 01823 355865David Jamieson: 01823 356617Andrew Newton : 01823 355147

Purchase Card Service Accounts PayableSomerset County CouncilCounty HallTaunton, TA1 4DY

Lost or stolen cards - out of hours contact the Nat West Helpline

0870-6000-459

Nat West contact number if abroad 0044 1268 508020

We strongly suggest that you complete the necessary information on this page and then take a copy of it home for reference if needing to ring the bank to report your P Card missing.

When you ring the Helpline number above, you will first be asked to provide the 16-digit number on the front of your missing card.

Hence, write your card number here ---- ---- ---- ----

Upon providing this, you will be transferred to another recorded message which explains that you will be asked two security questions and that your answers must be accurate.

One security question will almost certainly be to quote two requested characters from the password which you selected and entered on your card application forms.

Hence, write your password here ………………………

The other question could be either:

Your Date of Birth;

Your full work address to which your bank statements are posted each month;

The date on which the monthly statements are produced – this is always the 3rd (the bank month runs from the 4th of a month until the 3rd of the following month);

The spending limit on your card.

Section 1: Introduction and SCC Low Value Procurement Strategy

Somerset County Council’s Purchase Card scheme enables a more flexible approach to be taken to ordering and payment for goods. Many purchases can now be made without raising requisitions, official orders, or officers having to use their own money and reclaim their expenditure. The purchase card is a quick, simple and easy way to pay for low value purchases. It allows purchases to be made either by telephone, in person or online.

As well as providing greater flexibility, cardholders will have increased empowerment in undertaking purchases. Consequently, it is essential that the cards are strictly monitored and controlled by budget holders.

Units will be responsible for the day-to-day administration and operation of the purchasing cards.

This document establishes a corporate framework for the operation of the scheme throughout the authority and is issued in accordance with the requirements of the SCC financial regulations. No deviation to this process may be made without prior discussion with the Scheme Administrators and the formal approval of the SCC Finance Service.

The card works in the same way as a personal credit card. It is issued to a named individual and must only be used by that person.

The service and budget holder also benefit from comprehensive statements provided by the card provider.

Administration overheads are reduced, as there will only be one invoice to pay instead of many.

If properly operated, all of this will be achieved without compromising the control of your own budgets or exposing the Council to financial risk.

When the card is issued to the cardholder, it will have a number of pre-set limits to it, which will be agreed with Heads of Service/High Level Budget Holders. Each card will have an overall monthly maximum limit and a single transaction limit agreed with the cardholder’s line manager and Purchase Card Service to limit the financial exposure of the Council. The limits are decided after looking at past expenditure for items that the card will be used to purchase and taking account of any known variances. Agreed spending limits can subsequently be amended; requests for amendment should be made in writing (e-mail) from the cardholder who must copy in their budget holder.

SCC have recently introduced a new Procurement Strategy for low value items. This allows P-cards to be used for spend under £100 where a supplier does not already exist on SAP. The Low Value Procurement Strategy is reproduced below in full; items pertinent to the use of P-cards within SCC are highlighted. (NB this procurement strategy is not applicable to SCC Schools/PRU’s).

Low Value Purchases (under £1,000 net)

Description ActionRegular purchase of supplies and services eg stationery, consultancy

PO through SAP ie , unless the spend is for a PO exempt category eg travel and accommodation, these are paid through FI Code and Approve workcycle.

Ad-hoc purchase of supplies from a SAP supplier

PO through SAP, unless a PO exempt category

Ad-hoc purchase of supplies from a new supplier where the supplier may be used again

Firstly check whether there is a supplier already on SAP who could provide the supply/service. If there is you should use them.

If you do need to use a new supplier get the supplier set up on SAP and then raise a PO.

Please note suppliers should be created and POs raised prior to the order being placed with the vendor and definitely before any work is undertaken.

Ad-hoc purchase of supplies from a new supplier where the supplier will never be used again and the amount is under £100 (net)

As above check whether there is already a supplier you could use.

If not, use a p-card (if the supplier can accept it and the supply is not subject to CIS rules).

If supplier cannot accept p-cards then use one-time vendor

For Construction Industry Scheme suppliers, these must go through the standard PO process

Ad-hoc purchase of supplies from a new supplier where the supplier will never be used again and the amount is between £100 and £1,000

As above, check whether there is already a supplier you could use.

If not, process the invoice by using the one time vendor. EPRFs should not be used where an invoice is required from the supplier.

On-line purchases eg exam fees

P-card where possible, especially if you have to pay in advance, NB it maybe necessary for certain categories of spend to be unblocked to enable certain suppliers to be used via a P-card. Payment should not be made on-line where corporate contracts exist ie travel and stationery.

Purchase face to face in a shop

This should only be for supplies that you cannot obtain via SAP suppliers ie supermarkets. Use a p-card.

Section 2 Administrative Procedures

2.1 Application Process

All potential cardholders must have a briefing session conducted by a Scheme Administrator prior to receipt of their card. It is necessary to complete the SCC and Nat West Bank application forms at the briefing, not prior to, as this provides ensures the forms are completed accurately. It is also a useful way of answering users’ questions on spending limits, categories of business blocked from being used and helps establish the likely usage within the applicant’s workplace. Remember, cards cannot be issued by Nat West to applicants until they have received the briefing and their application forms have been completed and authorised.

The application forms which are emailed prior to the briefing include an Internal SCC Request Form to be completed by the applicant, the Nat West Purchasing Card Application forms, and an Authorisation Blocking Form. These forms are subject to frequent revision and hence are not reproduced in this handbook (NB copies of these forms are however available on request from the scheme administrators but only “for information purposes, not for completion prior to a briefing). A cardholder must also sign and agree to adhere to the conditions detailed in the Employee Undertaking (Appendix 1 to this package).

The Internal SCC Request form must be authorised by the applicant’s Head of Service, who should also check the other forms to ensure the spending limits and “unblocked” merchant categories selected are appropriate. The cardholder’s work address must be quoted on the Nat West Application Form, as monthly bank statements will be sent there. The spending limits required in section 3 of that form should be discussed and agreed with the authorising officer or budget holder in advance, unless that officer is available to provide this guidance at the time of the briefing.

The cardholder must quote a holding code on the SCC Request Form and the Nat West Application Form; the holding code is used by the Purchase Card Service to pay the bank on the behalf of the unit. The Master Data Team, will set up this code prior to the briefing on request from the Purchase Card Service.

There are certain types of suppliers that SCC block on purchase cards. These categories are ticked on the standard form, and an applicant can choose to block other categories for a particular card by ticking them. Category blocks can be also be requested to be removed during completion of the application with guidance/consent from the briefing officer, on the understanding that the applicant’s authorising officer is made aware of this when signing the SCC Request Form and agrees by counter-signing the unblocked category.

The cardholder must sign a copy of the ‘Employees Undertaking” form (Appendix 1); this sets out the responsibilities of cardholders and acts as confirmation of understanding. A copy must be retained by the cardholder along with a copy of the other application forms. The original forms must be handed to the briefing officer, or sent to the Purchase Card Administrators, once duly signed by the Authorising Officer (N.B. only the SCC Request Form and Employee Undertaking are to be signed by the applicant’s Authorising Officer – the other documents are signed off by a Senior Finance Officer in Corporate Accounting at County Hall).

On receipt of the card, the cardholder must immediately endorse the reverse of the card with his/her signature. Safe custody of the card then becomes the responsibility of the cardholder. 2.2 Misuse of the Card

The card must only be used to procure goods and services on behalf of Somerset County Council.

The card must only be used by the named cardholder. If the cardholder is absent, other purchase procedures must be used.

The card must be kept by the card holder “about their person” in working hours and taken home and stored safely in non-working hours, unless an exemption from this has been granted, either at the discretion of a scheme administrator during the briefing or following consultation with Internal Audit.

The card PIN number must only be known by the cardholder. Under no circumstances should this be divulged to any one else. If the PIN becomes locked or forgotten, ring the scheme administrators for advice.

2.3 Theft or Loss of Cards and Replacement Cards

If cards are lost or stolen within normal office hours, the cardholder should telephone the Purchase Card Service who will advise National Westminster Bank immediately by telephone. A stop will be put on the card and a replacement arranged. Out of normal hours, cardholders should report the loss immediately by calling the following Nat West helpline number:-

24 hr phone line 0870 600 0459.

The bank will stop the card and issue a replacement within 7-10 working days.

If the card is lost as opposed to stolen, a short delay in reporting it missing is acceptable whilst the card holder conducts a speedy search for it.

The cardholder should also notify the Scheme Administrators as soon as possible, as the replacement card with be delivered to them for forwarding to the card holder. They will also send the card holder an Internal Audit “Lost or Stolen Card” report for completion as soon as possible by the card holder and his/her authorising officer.

If a card that has been reported as lost/stolen is recovered, it must be cut into four pieces and returned in a sealed envelope to the Scheme Administrators. Recovered cards which have been reported and stopped cannot subsequently be used and no attempt to do so should be made.

Where two instances of loss and/or theft occur, the Scheme Administrators will make a decision on whether it is appropriate for the cardholder in question to receive a further replacement Purchase Card.

Nat West issue replacement cards every three years, 28 days in advance of the cards’ expiry date, to the Purchase Card Service. County Hall-based cardholders will be asked to collect and sign for their card. Other cards will be posted via 2nd class delivery to the cardholder’s usual address; an “acknowledgement of receipt” slip will be enclosed. This should be completed and returned to the Purchase Card Service as soon as the card is in possession of the cardholder. If the card is not received within a week, it is the card holder’s responsibility to inform the Pcard Administrators.

The procedures will be the same for replacement cards when they are damaged, stolen and lost.

On receipt of the replacement card, the cardholder must:

immediately sign the reverse of the card; destroy the old card on its expiry date by cutting into multiple pieces and disposing of.

However, replacements for damaged cards, or change of card details will not be issued until the old card has been surrendered to the Purchase Card Service The old card must be cut in to 4 pieces and returned to Purchase Card Service with an appropriate letter. Cardholders who change their surname and wish to have their card replaced will be asked to supply a copy of their marriage certificate or other appropriate certificate to the Purchase Card Service for forwarding to the card provider – this is a Nat West requirement.

2.4 Security

Security is one of the most important issues facing the card holder. Cards can, and have been, mislaid, stolen or cloned (copied) for subsequent use by thieves. Card holders need to be aware of all the possible dangers and it is recommended that they acquaint themselves with the contents of the Internal Audit Advice Note on the safe use of Payment Cards. This guide can be obtained by going to the following internet address or by contacting the Scheme Administrators.

http://www.somerset.gov.uk/somerset/centralservices/treasury/audit/index.cfm?override=publications&pubid=2535

The following points list some of the more obvious safeguards from the guide:

“In summary, it would be prudent, as a minimum, to carry out the following checks to ensure that any fraudulent payment cards transactions could be prevented or easily intercepted”:

ü CHANGE YOUR PIN on receipt of your card – this can be done at most cash machines, free of charge.

ü NEVER write down or tell anyone else your Personal Identification Number (PIN).Change your PIN immediately at a cash machine if you suspect anyone else may have gained access to it.

ü ALWAYS keep your card on your person at all times. This is an Internal Audit requirement.

ü NEVER let your card out of your sight, even for a second - all Chip and PIN cards should remain with the cardholder at ALL times. Avoid giving the card to a cashier to swipe the card.

ü TAKE CARE when entering your PIN – cover the keypad with your hand, wallet or purse so that no-one can see you entering your PIN.

ü NEVER use the same PIN for your P Card as is used for a personal credit/debit card.

ü CHECK all of your statements. If you notice anything strange on your statements or if you think someone may have accessed your card details, contact the Scheme Administrators immediately.

ü AVOID entering payment card numbers, internet banking ID's and passwords directly into your internet browser. Copy and paste them from Word or Notepad. If you are making phone or online payments, be aware of others close by who may try to take note of your account information. Don’t choose or change your security details in a public place, or with anyone watching.

The cardholder should avoid writing, e-mailing or faxing the card number to a supplier. If required to fax details of the front and reverse of the card ensure the security numbers or the reverse of the card are obscured. At all costs avoid handing the card to a supplier if the card is likely to be out of your sight, even momentarily; it is perfectly possible for thieves to clone card details within a matter of seconds.

The Scheme Administrators must keep the file containing the hard copies of the application forms locked away when not being used.

2.5 Return of Cards / Leavers

If a member of staff is leaving the unit it is the cardholder’s responsibility to advise the Scheme Administrators of their impending departure as soon as possible and to make arrangements for the return of the card. The card must be returned to the Scheme Administrators cut into four pieces and sent in a sealed envelope.

Cardholders must hand completed transaction logs to their line manager on the date the card is last used or at the very least before they leave their job.

2.6 Purchase card roles

1. Scheme Administrators

Responsible for:

- setting and maintaining standards for the scheme;- providing advice and guidance to all card holders and ancillary staff;- investigating, and reporting to the Senior Finance Officer or Chief Finance Officer or their

representative, all cases resulting from the compromise, misuse or fraudulent use of cards;- managing and undertaking the briefing and application process;- understanding all administrative duties relevant to the scheme;- ensuring prompt payment of monthly fees to the bank;- recovering the annual rebate from Nat West;- investigating and implementing agreed scheme enhancements;- maintaining and providing management information;- participating in appropriate audit reviews and implementing agreed action.

2. Chief Finance Officer

The CFO is currently the Director of Finance and Performance and is responsible for:

- initial approval of, and subsequent management of, the contract with the scheme provider;- ensuring all appropriate standards are met;- where appropriate, agreeing subsequent enhancements or improvements to the scheme;- providing advice and guidance to scheme administrators on required alterations to the

scheme;- in conjunction with senior finance officers (Directorate), approve or reject applications for P

cards;- oversee disciplinary action undertaken as a result of fraud or card misuse.

3. Senior Finance Officer

The SFO is the Chief Finance Officer for each SCC service area and is responsible for:

- providing specific advice or guidance to the scheme administrators;- overseeing the scope and deployment of cards within the service area;- investigating and reporting cases of fraud or misuse as reported by scheme administrators;- in conjunction with the Chief Finance Officer, approving or rejecting applications for a card.

4. Authorising Officer

The Authorising Officer is usually the head of the cardholder’s unit and also the budget holder. Their responsibilities are detailed in the cardholder’s application form – Purchase Cards (Request Details) – which the authorising officer is required to sign and date as part of the briefing process before the application can be forwarded to the card provider. The authorising officer/budget holder delegates authority to the card holder to incur expenditure on their behalf.

In short, this means ensuring the P Card is used ONLY for approved official expenditure, that the cardholder’s monthly log sheets are authorised in a timely manner and that the log sheets are subsequently processed promptly. .

5. Card Holder

Responsibilities are defined in the Employee Undertaking signed during the briefing Process – Appendix 1. In short, these include:

- ensuring the card is used only for approved expenditure;- maintaining the monthly transaction log sheets;- submitting completed monthly log sheets to the authorising officer in a timely manner;- immediately report to the authorising officer any anomalies, losses or compromises.

3.0 Purchasing Procedures

3.1 Common procedures

Care must be taken when using the Purchase Card. Please make sure you are familiar with the security guidance mentioned in 2.4 above.

When a purchasing requirement has been identified, the cardholder must:

Check the SCC Low Value Procurement Policy to ensure whether it is appropriate to use a P- Card, or whether a SAP PO is required to be raised – details in Section 1 above

Arrange for purchases to be authorised – ideally in the form of a requisition or request form duly signed. It is useful to attach these forms to the monthly transaction log

Check that there is not a Corporate Somerset County Council contract already in place for sourcing the goods/service. Where there is such a contract, it must be used (Schools & PRU’s are exempt from this). This can be checked through enquires made to the SCC Procurement team.

Having abided by the SCC Low Value Procurement Policy and also established that there is no corporate contract, the cardholder before using their P Card should identify a supplier who will offer the best price and conditions available. Ideally provide evidence of this – possibly in the form of annotation on the requisition / request form or by attaching other info to the transaction log.

Check to see if the supplier is capable of accepting your VISA P Card. If not, then the normal SAP purchasing procedures must be followed.

If the supplier is VISA friendly, check that the total value of the purchase is within the card single transaction limit (including any VAT). If the purchase is greater then contact the Scheme Administrators.

Single Transaction and Monthly Spend Limits can be raised temporarily or permanently. For temporary increases, the card holder should e-mail pcardenquiries@somerset.gov.uk. copying in their budget holder / authorising officer. If a permanent increase in limits is required, the cardholder’s budget holder should e-mail the request, copying in the card holder and his/her authorising officer and also line manager. Upon receiving an e-mailed request, the Scheme Administrators will notify the bank. Any verbal request for limit changes must be followed up with a prompt e-mail to the Scheme Administrators as above, confirming the verbal request (this can be arranged during the phone call). If a temporary limit increase is required, an end date must be given when requesting this. Again, any phone call should be followed by the appropriate e-mail.

The cardholder must log all purchases on the monthly transaction log sheet. Cardholders must reconcile their monthly transaction log (Appendix 2) with the Nat West statement within 14 days of receipt. He/she then needs to give both documents and all relevant receipts to a colleague to check for accuracy. All paperwork should then be given to the authorising officer for checking and approving. It then goes to the finance support team to pay the bill, which will clear the card holder’s holding code that has been used by Purchase Card Service to pay the bank on his/her behalf. The aim should be to clear holding codes by the end of each calendar month following receipt of the bank statement.

3.2 Purchasing by Telephone

The cardholder will need to provide the supplier with the card details when purchasing goods and services over the phone.

Wherever possible avoid faxing or e-mailing card details to a supplier. For example, some hotels have requested cards be faxed if the person travelling is not the card holder. If you have to do this, ensure the security numbers on the reverse of the card are not shown.

The cardholder must establish the quantity, specified quality criteria and the full cost before placing the order.

Where goods supplied are incorrect, contact the supplier immediately. If goods are to be returned without replacement, the supplier must arrange to refund the card holder’s card as promptly as possible. This should be noted on the transaction log sheet, since a credit amount should then appear on the next bank statement or possibly the following one.

The cardholder must request either a hard copy VAT receipt or invoice stating ‘paid by VISA’. This is necessary to enable a reclaim of VAT by the Council and also ensures a saving (currently of 20%) to the card holder’s team budget. Any VAT invoice received must not be then sent for payment, thus creating a duplicate payment; it is for VAT purposes only and must be attached to the transaction log as if it were a receipt.

3.3 Purchasing in Person

The purchase will be carried out as with a personal credit card. The card will be presented to the supplier and the payment slip signed, or pin number entered.

At all costs avoid allowing the card out of your sight even momentarily – in those few moments it is perfectly possible for the card to be cloned.

The cardholder must obtain a VAT receipt at the time of purchase, or ensure that one is forwarded before the 14-day reconciliation. If a receipt is obtained when making the purchase, try to avoid the supplier following it up by sending an invoice – if their system automatically produces an invoice, ensure it is posted or e-mailed to you personally and that it clearly states that payment has already been made by VISA credit card (i.e. your P Card), otherwise a duplicate payment might result.

Personal loyalty cards must not be used when making SCC card purchases because the employee would be benefitting from performing SCC business, and it may influence purchasing decisions.

3.4 Purchasing via the Internet

Much of the advice listed in section 3.2 is also relevant when purchasing via the internet.

Unfortunately, fraud via the internet is on the increase and it is particularly important to be aware of the particular hazards that are presented when using this medium. Do ensure you are familiar with the advice contained in 2.4 above. When buying over the internet avoid using traders that do not offer secure payment facilities – if in doubt look at their internet address, it should begin HTTPS – the “S” denoting it is a secure site. A Google search is also advisable for sites not previously used.

The following web page from the Office of Fair Trading has helpful guidelines:

http://www.consumerdirect.gov.uk/before_you_buy/online-shopping/tips.

4.0 VAT

All transactions that contain an element of VAT must be supported by a valid VAT receipt (or invoice) so SCC can reclaim the VAT, which is a significant amount of the bill.

Valid VAT receipts/invoices for purchases over £250 must show:1. An identifying number2. Date of supply and date of issue of the receipt or invoice3. Name, address and VAT registration of the supplier4. Name and address of the person to whom the goods are supplied5. Type of supply by reference to categories6. Description of goods or services supplied7. Quantity and rate of tax on each item8. Total amount payable excl VAT9. Rate of and cash discount offered10.Total VAT payable.

Receipts for purchases valued below £250 can exclude points 4,5,7,8 and 10, above.

On receipt of the VAT receipt the cardholder must:

Check that the items charged for are correct Check that the quantity and price is correct.

If any of the above is wrong, the cardholder must contact the supplier and request a refund voucher to be put through the card provider and a VAT credit note. This request must be noted on the transaction log.

Valid VAT receipts must be attached to the transaction log and the log updated and checked against entries on that month’s bank statement. The log, VAT receipts and bank statement must then be passed to the line manager for authorisation within 14 days of receipt of the bank statement. The VAT receipts must be retained with the log. If the signed log sheet and associated receipts need to be sent elsewhere for input of journal entries, the cardholder/authorising officer should send the originals to their appropriate finance team and retain copies of everything sent for filing away. These would need to be available for audit inspection.

The acquisition and retention of VAT receipts is essential. Revenue and Customs can ask to see our purchasing card records at any time. If SCC is claiming VAT without a valid VAT receipt, tax penalties will be received and these will be charged to your services budget.

5.0 Recording Purchases and Reconciliation of Nat West Statements

Transaction Logs must be completed on a monthly basis in line with the period covered by the Nat West statements, 4th of the month to the 3rd of the following month.

Appendix 2 contains an example of the log sheet. This is available in Excel format from the Scheme Administrators and can be modified to suit the unit’s own purposes. Although the form is relatively self-explanatory every transaction must be logged at the time of purchase, or as soon as possible thereafter. Each individual item purchased should be recorded as a separate item on the log,

Transaction slips and VAT receipts in support of purchases must be retained and cross-referenced to the log. The cardholder is responsible for the safe custody of the log and supporting documents.

Nat West provides a monthly statement to the Purchase Card Service and to each cardholder.

The Purchase Card Service pays the whole SCC purchasing card bill to Nat West on a monthly basis. The payment is processed through the Accounts Payable system and each cardholder’s monthly total spend is then charged to his/her holding code.

Cardholders must check and reconcile the statement against their transaction log to ensure:

All the items recorded on the statement have been ordered and the charge is correct Any outstanding credits have been applied correctly

The cardholder must follow up any incorrect entries (e.g charged twice for the one purchase) with their supplier and any unrecognised entries with the Scheme Administrators. They may prove to be supplier errors or fraudulent use of your card.

Where an agreed credit has not appeared on the Nat West statement, details of the credit must be carried forward to the following month’s transaction log. The current month’s log must be marked in the “notes” column to detail that the outstanding credit has been carried forward. Goods not received or goods received and not charged for must also be treated in this manner.

Transaction logs sheets and also bank statements must be signed and dated by the cardholder to verify that the recorded entries on the bank statement are correct and match the entries on the log.

The reconciled bank statement, transaction log and supporting VAT receipts/invoices must be forwarded to the ‘Authorising Officer’ for authorisation, after being checked by an admin officer, within 14 days of receipt of the statement. The authorising officer must ensure that the required journal (from holding code to relevant GL codes) is entered promptly. It must be actioned by the end of the calendar month in which the bank statement is received unless there are extenuating circumstances. The original VAT receipts/invoices, transaction log and statement must be retained by the journal input team, and separate copies filed away by the cardholder for possible audit inspection.

Section 6: Procedures for Schools

Because SCC schools use a separate system (SIMS) for part of the purchasing process some alternative procedures need to be adopted.

Holding codes need to be agreed and set up in advance with the Masterdata Team. Please also contact the Scheme Administrators.

The format of the code will be something like this: 90**** 99023

Use of SIMS

When purchasing large items, schools may wish to consider raising an order on SIMS (using the supplier the goods are purchased from) so that a commitment is created on the system (no need to send the printed order to the supplier). The order must be cancelled when the invoice is paid to Somerset County Council to avoid double counting the cost.

After checking the monthly statement against the transaction log Central Payment Schools raise a non-order invoice on SIMS to Somerset County Council (SAP vendor number 11009327) charging the relevant ledger codes and cost centres. The process is:

1) Create a non order invoice against the SCC vendor record held in SIMS (SAP vendor number 11009327).

2) Enter the holding code details in the invoice number field.

3) Enter each purchase made as a separate line coded against whatever cost centre and ledger codes are appropriate to the specific item bought.

4) Download the invoice to SCC in the usual manner using Edcomms.. The transaction will appear on the monthly tab and can be manually reconciled against the invoice.

5) When the payment is produced SCC’s cashiers are given details of the payment and the holding code that the payment should be paid to.

Rather than download the invoice to SCC, Local Payment Schools will raise a cheque made payable to Somerset County Council (please ensure the holding code number is included on the remittance advice) and send it to the Cashiers Office, Purchase Card Service, County Hall.

Please keep purchase requests, receipts, transaction logs and bank statements together for audit purposes.

Section 7.0: Accounting Protocols

This information is aimed at Finance Officers looking after financial records.

The following accounting protocols will be applied for each and every purchasing card:

All accounts are set up to clear the balance within normal terms. Credit arrangements are not entered into.

A unique holding code must be created on SAP for each and every card by the master data team. This is to be held on the Service’s balance sheet with the nominal 99023 (charge card / credit card control a/c).

No other company, credit or charge cards are to be operated. Balances on any such accounts must be settled and cleared, the agreement cancelled, and the cards destroyed.

Finance managers are responsible for ensuring no alternative codes are used, and will be held accountable if the protocols are not followed.

The cardholder will maintain a log of transactions against the P-Card, along with VAT invoices / receipts for every item. The cardholder must reconcile the log to the statement and have them approved by their line manager.

When statements are received 2 GL accounting entries are required:

i. By Service Finance Officers on a _PCD (e.g. NPCD) batch header:

DR Revenue account e.g. DR VAT control account * e.g. 901221 99001 CR P-Card control account e.g. 901408 99023

ii. By Accounts Payable Control team, by raising a payment through SAP:

DR P-Card control account e.g. 901408 99023CR Creditors control account (automatic contra)

Please note: these examples of management and nominal codes which were relevant to the CedAr financial system have been replaced by Cost Centre and GL Account Codes in the new financial system SAP.

It is imperative that services use the _PCD batch header to facilitate isolation of all P-card expenditure without having to ask all Finance teams to submit summary information.

If the BACS is not paid until the following month, this will leave the balance (correctly) as a creditor at the month or year-end on either the P-Card control account, or if input into PL, within the creditors control account.

It is the Chief Finance Officer’s responsibility to ensure that their control accounts are properly reconciled at all times and that after the BACS payment that they are zeroed. It is NOT good practice to wait for the PL entry to be processed before charging the expenditure to revenue. In other words, the control account should either have a credit balance or be nil, it should never have a debit balance (as it is a creditor account).

Appendix 4Purchase Card ServiceAccounts PayableCounty HallTauntonSomerset TA1 4DYDirect Line: (01823) 355253 / 355865Fax; (01823)355554; E-mail: pcardenquiries@somerset.gov.uk

PURCHASE CARDS[EMPLOYEE UNDERTAKING]

NB The Authorising Officer is to hold a signed copy on file for future reference. The original signed copy is to be returned to the Purchase Card Service.

1. I accept responsibility for the security, safe keeping and confidentiality of the purchase card issued to me and will keep it on my person at all times as stated in section 2.4 of the Procedures handbook.

2. I have received a copy of the Purchase Card Procedures handbook and will comply with its requirements.

3. I undertake to use the Purchasing Cards solely for authorised business use. I understand that inappropriate use of the card will be considered gross misconduct and be subject to disciplinary action.

4. On leaving the authority or when my duties no longer require me to be a cardholder, I agree to return the purchasing card to the Purchase Card Service and to submit final details of spending on a monthly log sheet to my manager/authorising officer.

5. I agree to telephone the Purchase Card Service immediately if my card becomes lost or stolen, or I suspect it to have been used fraudulently. If lost or stolen out of office hours, I agree to telephone Nat West immediately. I will also inform my line manager as soon as is practicable.

6. I understand that any unsupported expenditure deemed by my authorising officer not to be for business use will be recovered from me.

7. I commit to maintaining a log of transactions, to reconcile the log to the card issuer’s statement each month [within 14 days of receipt] and to ensure a VAT receipt is obtained for all goods purchased that are subject to a VAT charge.

8. I agree to co-operate with all parties including the Police and the Nat West bank as and when required.

This employee undertaking covers usage of the initial card and any subsequent cards issued to replace cards lost, stolen, expired or damaged.

CARDHOLDERS SIGNATURE…………………………..………… DATE…………….

Full Name…………………………………………… Workplace Tel No.……………………….

Service Area ………………………………….………….. SAP / Personnel ID no. ……………………

Authorising Officers signature ……………………………….