5.3.3 Purchasing Cards

Formerly Known As Policy Number: 54.5

This Guide Memo contains policies on use of Purchasing Cards (PCard) to purchase goods or services directly by departments. This policy establishes the rules and guidelines for appropriate use of the Stanford-issued Purchasing Card. This policy is based on and in alignment with the expectations set forth by AGM 1.1.1: Code of Conduct, specifically with regard to employing sound business practices and exercising prudent financial management in the stewardship of University resources. For detailed guidance and supporting resources, see the Purchasing Card (PCard) overview on Fingate.

1. Purpose

Stanford Purchasing Cards (PCards) are university-liability credit cards issued to active, authorized and trained Stanford employees to purchase eligible goods and services in support of Stanford University business. Only eligible business purchases that are $4,999 or less may be charged to the PCard; splitting transactions and personal purchases are strictly prohibited. All PCard transactions must be reviewed and verified in the PCard system and substantiated by adding a detailed and appropriate business purpose and proof of purchase documentation. See detailed policy and guidance for the PCard on Fingate.

There are two types of PCards: an individual PCard and a Department PCard. The individual PCard is issued to a specific person who is the cardholder and has direct responsibility for facilitating business transactions for a department. The Department PCard is issued to a department and assigned to an individual custodian, who acts as the cardholder. The custodian may use the card directly to facilitate business transactions for the department or may allow usage of the card by others within the department once verifying that the card will be used in alignment with any department and university policies. The policies are the same for both types of PCards, unless specifically noted.

PCards should be used for smaller dollar items ($4,999 or less). iProcurement, which provides users with access to shop from Amazon Business and SmartMart catalog suppliers, is the preferred method for purchasing goods and services due to the university’s greater ability to manage risk, compliance and regulations. Additional benefits of Amazon Business and SmartMart catalog suppliers include pre-vetted suppliers, pre-negotiated pricing and efficiencies such as repeat ordering and a streamlined invoice and payment process. Using a PCard instead of iProcurement to purchase items should be limited to instances where there is substantial benefit.

a. Responsibilities

All university business purchases must be substantiated within 60 days of the expense being incurred. For PCard transactions, this means that transactions must be verified (including appropriate documentation, business purpose and account information) and fully approved within 60 days of the charge being available for verification in the Oracle PCard module. A reasonable timeframe for verification is within 10 days of the charge appearing in the module. Failure to complete verification and approvals within 60 days may result in card suspension and/or expenditures (charges) reported as taxable income to the cardholder or individual custodian.

If a PCard transaction is not verified and approved within 60 days, the transaction will be force cleared by Financial Management Services to a department guarantee account (PTA.) This process occurs at the end of each fiscal quarter. The department is then responsible for allocating the force cleared transaction(s), via the iJournals system, to the appropriate account (PTA) and expenditure type.

For information on how to find and manage force cleared PCard transactions, visit Managing Aging and Outstanding Expense Transactions on Fingate.

b. Verification and Approvals

Cardholders may verify their own transactions. However, all transactions must route to an approver that meets the following criteria:

1. has authority over the account (PTA) charged,

2. does not report directly or indirectly to the cardholder, and

3. is not the beneficiary of the transaction.

A detailed description of all roles and responsibilities is available from the Purchasing Card (PCard) overview on Fingate.

c. Misuse

Participation in the PCard program is considered a privilege that carries the responsibility to ensure appropriate use and stewardship of University funds. Inappropriate use of the PCard may result in the loss of the privilege, disciplinary action and/or in termination of employment. Fraudulent use may additionally result in criminal prosecution. The cardholder/custodian or card user will be held personally liable for all unauthorized purchases.

2. Authority to Purchase

a. Basic Criteria

The PCard is available to active Stanford University employees. Eligibility is based on a departmentally-determined business need and requires:

• Completion of an online application providing:
  • a guarantee account (PTA)
  • the individual responsible for verifying PCard transactions
• Approvals from the requesting cardholder's manager or department chair/dean and the appropriate financial approver for the guarantee account (PTA) provided
• Completion of required training

For more information, see Stanford’s Purchasing Card (PCard) Program.

b. Delegation of Authority

Individuals who have been authorized by their department for PCard use may purchase eligible goods and services, in accordance with the Purchasing Card Policy, for up to $4,999. These purchases must be reasonable and necessary, consistent with established university policies and practices, applicable to the work of the university, including instruction, research, and public service, and must be consistent with sponsor or donor expenditure restrictions.

Note: The purchase cost includes tax, shipping, handling and installation, if applicable. The total purchase item cost cannot exceed $4,999.

c. Department Responsibility

Delegation of authority comes with the responsibility to adhere to University policies and procedures related to purchases.

3. Permissible and Non-Permissible Purchases

For a complete list of permissible purchases, see policy and guidance for the PCard Departments may have more restrictive PCard policies.  

a. Examples of permissible purchases ($4,999 or less):
 

• Office supplies (only when there is substantial benefit to using a PCard rather than Amazon Business and SmartMart)
• Postage and mailing supplies and services
• Photocopies and printing
• Books (including departmental library materials)
• Conference Registration/Training Fees where no travel is required
• Dues and subscriptions
• Memberships to professional organizations
• Gifts, awards, and food in support of employee morale (per Administrative Guide Policy: 2.2.10 Gifts and Awards for University Employees)
• Service and retirement awards (per Administrative Guide Policy: 2.2.10 Gifts and Awards for University Employees)
• Local business meals

b. Non-permissible purchases

• Personal Purchases

All PCard purchases must be for the benefit of the university; anything purchased for personal use may be considered a fraudulent transaction and may result in the consequences described in the 1. Purpose; c. Misuse section above.

• Purchases with Unique Compliance Requirements

Some types of purchases are not permitted on a PCard due to the difficulty of complying with regulatory requirements, health and safety policies, tax reporting rules or the need for a contract or insurance to protect the university’s interests. 

• Purchases more Efficiently or Cost-Effectively Purchased via other Channels

Other types of purchases are not permitted because the university provides a more efficient, cost-effective or controlled method to obtain the item.

The following list includes examples of items that may not be purchased using a PCard. Additional examples are available on the Stanford Purchasing Card Policy webpage.

• Personal purchases of any kind
• Any purchase over $4,999
• Split transactions (any purchase that would be over $4,999 if not split into multiple transactions.)
• Computers, software, mobile devices and related services to be obtained through purchasing methods recommended by UIT, such as
  • Electronic and computing equipment
  • Cloud computing services
  • Mobile devices and accessories
• Capital equipment/fixed assets and fabrications. A fabrication is a unique item that cannot be acquired off-the-shelf, has a useful life of more than one year, and is made of components that cumulatively cost $5,000 or more. See more about Capital Equipment and Equipment fabrications on the DoResearch website.
• Purchases requiring regulatory compliance, such as:
  • Hazardous materials
  • Lab animals
• Transactions that might limit or impact the university’s ability to meet tax-reporting requirements, such as:
  • Certain ecommerce purchases
  • Purchases from or payments to foreign vendors, which may be blocked by customs departments
• Travel-related purchases: see Guide Memo 5.4.2, Business and Travel expenses
• Transactions where contracts or insurance may be required, such as:
  • Venues/facilities for events
  • Moving, storage, leasing

4. Roles and Responsibilities

It is the responsibility of the individual incurring the expense(s), those who assist others with incurring expenses and those involved in the preparation and approval of financial transactions to exercise good financial stewardship over university funds, including adhering to all university policies. See detailed description of all roles and responsibilities: Stanford’s Purchasing Card (PCard) Program.

The custodian/cardholder is responsible for staying current with all PCard policies and procedures, including seeking assistance prior to making/authorizing a purchase if there are questions. All roles below should also be familiar with and refer to Guide Memo 3.5.1 Financial Irregularities as well as the related university resources.

1. PCard roles and responsibilities include:

1. Individual PCard Cardholder, responsible for keeping the PCard secure and adhering to all university and department policies and procedures.
2. Department PCard Custodian, all of the same responsibilities as the Individual PCard Cardholder, plus responsibility for all charges made on the department PCard and for tracking the usage and location of the card.
3. Designee (Department PCard User ), responsible for making purchases using a department PCard, following guidance of the Department PCard Custodian and promptly returning the card and any receipts.
4. Verifier, responsible for reviewing and processing transactions as soon as possible (and within 60 days of the transaction’s posting to the PCard module), including attaching required documentation and charging the appropriate account, and reporting or disputing any fraudulent charges to the appropriate contacts.
5. Cardholder’s Authorized Manager, responsible for monitoring the use of the individual and/or Department PCard and assisting with any PCard audits or investigations.
6. Financial Approver, responsible for ensuring that PCard charges are appropriate, comply with department and university policies and procedures, spending limits, and budgets. The PCard Cardholder or Custodian may not be the approver and must route all transactions to someone with financial authority over the account charged and who does not report to the individual who made the purchase or on whose behalf the purchase was made (beneficiary).
7. Unit and Department Finance Managers, responsible for ensuring faculty, staff and student employees are informed of and comply with PCard requirements, and have general oversight, including ongoing monitoring, of the process and use of the PCard to ensure timely processing of transactions and immediate reporting of non-compliance.
8. Financial Management Services’ Card Services Team, responsible for monitoring and secondary auditing process for PCard transactions, communicating identified non-compliance or unauthorized charges to departments, and facilitating card suspension and force clear processes, as appropriate.

2. Additional Review and Audit

All Stanford PCard transactions are subject to additional review by the central Financial Management Services department, as well as by internal and external auditors for financial stewardship including compliance with institutional policies and procedures, and any applicable laws and regulations.

3. Assistance

Fingate, the Gateway to Financial Activities website, provides process and procedural information for PCard holders, verifiers and approvers. See the Stanford’s Purchasing Card (PCard) Program, Purchasing Card (PCard) Policy and Purchasing Card (PCard) system pages.

The Financial Support Center (FSC) is available to consult with departments on the application process, training, and use of the Purchasing Card.

AGM 3.5.1: Financial Irregularities provides procedures to follow when a suspicion or discovery of financial irregularities arises, as well as resources to report potentially suspicious activity.

5. Alternatives to the Purchasing Card

Several methods are used to purchase items. In order to choose the most efficient and cost- effective method, see Purchasing and Payment Methods. Additional resources are available at the Stanford’s Purchasing Card (PCard) Program and Stanford Purchasing Card Policy.