1. Best Practices in Use of Procurement cards
December 9, 2015

2. TOPICS Background Best Practices – Management level
What are Procurement cards?
What are the advantages of using procurement cards?
What are the disadvantages of using procurement cards?
Best Practices – Management level
What are management’s responsibilities?
Best Practices – Reviewer/User level
What are reviewer/user responsibilities?
Additional Resources and Q&A

3. BACKGROUND What are Procurement Cards?
Personal charge cards that have the ability to set individual charge limits (daily and monthly), transaction limits, and merchant type restrictions.

4. BACKGROUND What are the advantages of using procurement cards?
Streamlines low-value purchases (less use for petty cash)
Timely payment of vendors
Eliminates individual payments to vendors
Ability to pay outside vendors and online vendors
Ability to set individual spending limits

5. BACKGROUND What are the disadvantages of using procurement cards?
In some instances increased documentation
Opportunities for fraudulent, improper and abusive purchases
Fraudulent – personal purchases not for government use
Improper – purchases that are for government use but not permitted by law or policy (split purchases, purchases not from preferred vendors, certain travel)
Abusive – Purchases of authorized goods or services at terms (price/quantities) that are excessive, questionable need or both.

6. Responsibilities of Management
Administration of the Program
Procurement card manual
Approving users and limits
Training of users
Standardized procedures both for the users and reviewers
Monitoring of implementation
Use of data mining to identify unusual transactions

7. RESPONSIBILITIES OF USERS/REVIEWERS
Ensure compliance with policies and procedures
Documentation
Competitive bids
Proof of receipt of goods
What are violations / restricted uses?
Prevent and detect misuse of cards through internal controls
Reporting of misuse and violations
Cancellation of cards upon termination

8. ADDITIONAL RESOURCES GAO – Audit guide
COSO – Internal control guidance
CA State Procurement program resources
Recent Internal Audit of Procurement Card – San Diego
Recent SCO Audit of Procurement Card

9. QUESTIONS?
HONG NGUYEN 1839 W. REDLANDS BLVD. REDLANDS, CA P: (909) C: (909)