University Procurement and Logistics

271.1       Purpose
271.2       General Policies
271.2.1         Sharing the PCard
271.2.2         Spending limits
271.2.3         Multiple transactions
271.2.4         Restricted items
271.2.5         Software purchases
271.2.6         Amazon Business account
271.2.7         Sales tax
271.2.8       Shipping
271.2.9        Recurring payments
271.2.10       Trade sanctions
271.2.11        International transactions
271.3       Reconciliation and Accounting
271.3.1         Itemized receipts and business purpose
271.3.2         PCDO eDoc creation and approval
271.3.3         45-day approval limit
271.3.4         Separation of duties
271.3.5         Periodic reviews
271.4       Responsibilities
271.4.1         Expenditure policies
271.4.2         1-2-3 Strike Policy
271.4.3         Card suspension/cancellation
271.4.4         Reporting lost/stolen cards
271.4.5         Cardholder and fiscal officer responsibilities
271.5      Audits
271.5.1         MSU audits
271.5.2         Restitution
271.5.3         Reporting suspected misconduct

271.1  Purpose

The MSU PCard provides for the direct procurement of low-dollar, low-risk purchases by Michigan State University faculty and staff using a credit card. The intent of the program is to increase efficiency by eliminating the need for small-dollar requisitions, disbursement vouchers, and petty cash funds. PCard purchases result in quicker turnaround time, greater flexibility in ordering, and reduced paperwork. There are restrictions with the use of the PCard, including prohibitions on personal use, travel, radioactive material, capital assets, and more. For a complete list of the restrictions, as well as other information regarding the PCard, see the  PCard Manual. 

The PCard is a privilege granted to faculty and staff (excluding on-call, temporary employees, undergraduate and graduate students). It is to be used in a responsible and appropriate manner. Fraudulent or intentional misuse (including the use of the PCard for personal purchases) will result in revocation of the PCard, possible criminal charges, and discipline up to and including termination. Periodic audits of each cardholder’s transaction file and monthly statement reconciliations are conducted by the Office of Audit, Risk and Compliance (OARC). In addition, the PCard team conducts compliance reviews using various reports and transaction audits to ensure that cardholders are adhering to MSU, MasterCard®, and bank policies and procedures. Questionable activity is referred to OARC for further investigation.

Back to Top

271.2  General Policies

271.2.1      Only the authorized cardholder may use the PCard. Delegation of authority is not permitted. Sharing the PCard with others is prohibited as it increases the likelihood of fraud. The cardholder is held responsible for all charges made against their PCard. As such, cardholders should monitor their PCard transactions carefully and alert the PCard team and bank if fraud is suspected.

271.2.2     Individual transactions must not exceed $5,000 on the deafult-limit card (including shipping/handling). Transactions at $5,000.01 and greater will be denied at the point of sale. The monthly limit for PCard transactions is $25,000. The spending limits can be increased to $9,950 and $50,000, respectively, using the PCard Maintenance Document (PCMD) within KFS, with approval from the account fiscal officer. Please note requests made via the PCMD will not be changed with the bank until the PCard team has approved the eDoc. The cardholder and default account FO will receive an FYI notification that the request was completed once the PCard team has approved the eDoc. Spending limit changes to Contract and Grant accounts must be ad hoc routed to the CGA office for approval.

271.2.3     It is not permissible to make multiple charges in the same day, or consecutive days, to the same merchant to facilitate a charge that exceeds $5,000 (except for the payment of conference registration fees where a cardholder needs to register multiple attendees for the same conference).

Back to Top

271.2.4     In addition to the expenditure policies outlined in the Manual of Business Procedures, certain items are prohibited from being purchased on the PCard. For a list of restricted items, see the PCard Manual.

271.2.5    Before software can be purchased on a PCard , the cardholder is asked to  review the Approved Software List provided by MSU IT.  

1. Tier 1 software with a price lower than the cardholder’s single transaction purchase limit may be purchased on a PCard without any further approvals. A note must be added to the PCard transaction eDoc stating: “This software is on the Approved Software List version #.”  
2. Tier 2 software with a price lower than the cardholder’s single transaction purchase limit may be purchased on a PCard if the user type or use case is met. A note must be added to the PCard transaction eDoc stating: "This software is on the Approved Software List version #. User type and use case match Tier 2 Approved Software List version #."  
3. Tier 3 software with a price lower than the cardholder’s single transaction purchase limit may be purchased on a PCard following the approval of an IT Readiness form via a requisition in KFS. This allows the proper security and accessibility reviews to be conducted. Following the appropriate approvals, Procurement will cancel the requisition, noting that the purchase can be made with the PCard. At that time, the cardholder can proceed with the purchase.

271.2.6     The PCard—unlike any other credit card, university-issued or otherwise—is used to place purchases with the MSU Amazon Business account in Spartan Marketplace. No other cards (personal, meeting planner, travel) are authorized for use in Spartan Marketplace.

271.2.7     The MSU Federal tax identification number (38-6005984) is included on every PCard. It is the cardholder's responsibility to ensure that sales tax is not charged by providing suppliers with a copy of the Sales and Use Tax Exempt Status Certificate.

1. If the supplier is not accepting of MSU’s tax exempt status, please contact the Office of the Controller for assistance.
2. Cardholders should contact the vendor for a tax credit in cases where sales tax was incorrectly assessed on purchases of $1,000 or greater.
3. The cardholder’s attempts to rectify incorrect sales tax charges must be documented in the Notes and Attachment section of the PCard transaction eDoc .  
4. Refer to the Office of the Controller’s FAQ on Sales and Use Tax and Section 50 of the MBP for further guidance on sales tax.

271.2.8     All PCard orders can ship to an official MSU address, research facility location, or home address, as authorized by your departmental leadership. PCard deliveries should not be made to MSU Central Shipping and Receiving unless special arrangements have been made in advance. The cardholder is responsible for ensuring receipt of materials as well as any follow up efforts required to resolve delivery problems, discrepancies, damaged goods, billing problems, and returns.

271.2.9     The PCard may be used for recurring payments for items or services that do not exceed $2,000 per month—provided the items or services are not prohibited from purchase per the PCard Manual.  For a high volume of such transactions, a purchase order (PO) may be a more appropriate vehicle , so please consult with Procurement if you think the total value will exceed $25,000 per year.

271.2.10     The U.S. Treasury Department's Office of Foreign Asset Control (OFAC) maintains a list of countries with which economic trade sanctions have been imposed. The sanctions pertain to the importing and exporting goods and services to and from countries whose practices are inconsistent with U.S. foreign policy and national security. Under no circumstances should a shipment or purchase be made to or from a country that appears on the sanctioned list regardless of the funding source. MSU employees must abide by all export controls, including during the purchase of intangible goods such as software.

Federally funded contracts may further restrict purchases from certain parties who are deemed excluded from receiving federal contracts, subcontracts, etc. These individuals and/or businesses can be viewed on the U.S. Treasury Department website . Under no circumstances should purchases be made from these listed parties using a PCard tied to federal funds.  

271.2.11      PCards may be used for international transactions , as long as the requirements and policies outlined throughout the Manual of Business Procedures are met .  

1. The PCard is not to be used for transactions while the cardholder is in travel status.  
2. A 1% international transaction fee will be automatically assessed by the bank and added as a separate line to the PCard transaction eDoc. No receipt is necessary for this fee.    
3. If the transaction is declined at the point of sale, it may have been flagged by the bank as potential fraud. Please contact Bank of America’s Fraud Department at (800) 432-1000 for assistance.  
4. MSU’s tax exempt status does not protect against f oreign sales tax or value added tax (VAT) , which may be assessed on international transactions.  

Back to Top

271.3 Reconciliation and Accounting

1. The cardholder is responsible for obtaining receipts, packing slips, etc. for all PCard purchases. Itemized receipts for PCard purchases must be scanned and attached to the corresponding eDoc in KFS. This policy applies to all PCDO eDocs. Receipts must be:
   • scanned and attached to the Notes and Attachments tab of the eDoc
   • itemized and legible
2. When placing an order over the phone, remind the merchant that an itemized receipt is required with the shipment.
3. A business purpose must be indicated either on the receipt, the eDoc description line or explanation block, or in the Notes and Attachments tab. A business purpose means a clear explanation of how and why the item or service will be used or was needed.

271.3.2      PCard transactions are routed to the cardholder’s action list in KFS on a PCard Document (PCDO) eDoc for approval and reallocation. These daily PCard eDocs consolidate all purchases from each PCard number into one eDoc. All associated approvals (cardholder, fiscal officer, and ad hoc approvals) are to take place in KFS.

271.3.3      Between the cardholder, the fiscal officer, and any ad hoc approvals, there is a total of forty-five (45) days to approve the PCDO transaction before being considered in violation of PCard policy. During this time, the cardholder and fiscal officer can edit the account number (if needed), add subaccount elements, assign the correct object code (the default PCard object code is 6559), attach appropriate documentation, and approve the eDoc.

271.3.4      An FO may not oversee their own transactions. It’s required by both the Office of Audit, Risk and Compliance and the PCard team that an appropriate separation of duties exists. In cases where the cardholder is also the account FO, the FO must ad hoc route PCDO eDocs to their supervisor for approval.

271.3.5      It is recommended that units perform a periodic (approximately every four to six months) review for each cardholder. This will help ensure that university policies are being followed on a collective basis, as opposed to the daily review completed by eDoc. Guidance on conducting department-level PCard audits can be found in the PCard Manual. 

Back to Top

271.4  Responsibilities

271.4.1      The cardholder is expected to adhere to university expenditure policies, detailed in the MSU Manual of Business Procedures. Purchases made on the PCard must be in accordance with the established policies and be made in an ethical manner.  Preferences or set-asides for diverse suppliers or Minority/Women-owned Business Enterprises (MWBEs)—unless a federal requirement for receipt of funds—are not allowed per Michigan law.

• CONSTITUTION OF MICHIGAN OF 1963  
  Article I § 26The University of Michigan, Michigan State University, Wayne State University, and any other public college or university, community college, or school district shall not discriminate against, or grant preferential treatment to , any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.  

271.4.2      The PCard is a privilege granted by the university and it is expected that it will be used responsibly. Violation of the PCard policies may result in loss of this privilege. A 1-2-3 Strike Policy is in place to handle PCard policy violations. The cardholder and their FO will be notified of all strikes given; however, a warning may be given to cardholders only prior to the incurrence of a strike. Strike 1 will result in a 30-day card suspension; Strike 2, 90-day card suspension; and Strike 3 will result in card cancellation, and the employee will not be able to apply for a new PCard for a period of 12 months. Example policy violations that may incur a strike include:

• Any violation of any section of the MSU Manual of Business Procedures
• Missing business purpose or itemized receipt on the eDoc
• Purchase of a restricted item, without prior approval from PCard team
• Splitting charges to skirt the single transaction limit
• Failure to have PCDO fully approved within 45-day time limit
• Failure by fiscal officer to ad hoc route their own PCard transactions to supervisor
• Exceeding the monthly spending limit
• An audit finding by the Office of Audit, Risk and Compliance
• Inappropriate charge of sales tax  with out documented attempts to rectify
• Sharing card information

271.4.3      Department administrators can request that a PCard be suspended or canceled at any time by submitting a PCMD through the Finance System. For urgent requests, please notify the PCard team immediately.

271.4.4      If a PCard is lost or stolen, it is the cardholder's responsibility to notify the bank and the PCard team. The credit card will be canceled immediately, and a replacement credit card issued. If the PCard is stolen on campus property, cardholders must also contact the MSU Police Department. The department/account will be liable for any charges that may have occurred prior to the PCard being canceled.

Bank of America
(888) 449-2273 (24 hours/day; 7 days/week)

PCard team
(517) 884-6080, or (517) 355-1700

MSU Police Department
(517) 355-2221 

Back to Top

271.4.5      Although the PCard has many built-in controls, there are certain steps that the cardholder and fiscal officer must take to ensure the responsible use of university funds.

1. Cardholder responsibilities:
   • Ensure that MSU's resources are spent in a responsible and ethical manner, in accordance with the Manual of Business Procedures.
   • Never share a PCard; only the authorized PCard cardholder may use the PCard.
   • Be aware of prohibited items.
   • Never use the PCard for personal use.
   • Immediately report a lost or stolen card.
   • Obtain original itemized receipts for all purchases. Note business purpose on receipt.
   • Notify the merchant that MSU is tax exempt and provide the tax ID number or Sales and Use Tax Exemption Certificate if requested by the merchant.
   • Review the PCDO in action list in the Finance System within fourteen (14) days of eDoc creation date. Scan and attach receipt into the eDoc prior to submitting it for approval by the FO. Ensure receipt of materials or service, and resolve any delivery problems, discrepancies, damaged goods, billing problems or returns with merchants.
   • Submit a Statement of Questioned Items form to the bank for disputes that cannot be resolved directly with the merchant.
   • Request updates to the cardholder record using the PCMD eDoc, including for changes in legal name, address, phone, and email address.
   • Prior to the effective transfer date when moving to a new unit, cardholders can either:
   • • Submit a PCMD eDoc to modify their default account number, organization code, address, and phone number. This allows the cardholder to move with their PCard to the new unit.
     • Submit a PCMD eDoc requesting a cancellation of the PCard. This option is intended for cardholders that will no longer need a PCard in their new role. The PCard should be cut up and destroyed upon transfer.
     • In either case, all receipts for outstanding purchases should be turned over to the fiscal officer so the final eDocs can be reconciled.
   • Prior to the effective termination date of a carhdolder's employment at MSU, the cardholder is required to request the cancellation of their PCard via a PCMD eDoc in the Finance System. The card should then be cut up and disposed. PCards must not be left behind. Cardholders are responsible for all purchases up to the point of cancellation.
2. Fiscal officer responsibilities:
   • The fiscal officer is responsible for verifying the accuracy of cardholder documentation on all PCDO eDocs. A PCard Audit Checklist is available for FO use to ensure compliance.
   • An FO may not provide oversight for their own PCard transactions. It’s required by both OARC and the PCard team that an appropriate separation of duties exists. In cases where the cardholder is also the account FO, the FO must ad hoc route PCDO eDocs to their supervisor for approval.
   • Attend cardholder training to better understand the program and ensure compliance.
   • Review all transactional eDocs and receipts, verifying the accounting lines and the transactions are appropriate expenditures of university funds and comply with university policy.
     • Yes – continues with routing PCDO (if applicable).
     • No – returns to PCDO for additional actions (allows users to ad hoc route to a supervisor).
   • When a cardholder terminates from the university or transfers to another department, verify a PCMD has been submitted to cancel the PCard.
   • Complete final transactional eDoc reconciliation for employees who’s last eDocs arrive after they have left their position. The cardholder is required to leave all outstanding receipts with the FO in this case.
   • Submit any address, telephone number, and/or monthly spending limit changes for cardholders using the PCMD in the Finance System.

Back to Top

271.5  Audits

271.5.1      OARC, Contract and Grant Administration, and/or the PCard team will conduct periodic audits of cardholders' transactional eDocs and monthly statements. Additionally, the PCard team performs compliance reviews to ensure that PCard procedures are being followed properly. OARC, Contract & Grant Administration, or the PCard team may request additional documentation on a particular transaction or group of transactions where they appear unclear or lack proper detail. The cardholder must provide the information by the date requested or the PCard may be suspended.

271.5.2      The university will seek restitution for any inappropriate charges made to the PCard. Fraudulent or intentional misuse (including the use of the PCard for personal purchases) will result in revocation of the PCard, possible criminal charges, and discipline up to and including termination.

271.5.3      All administrators, faculty members, support staff, and other employees are to promptly report any known or suspected fiscal misconduct by contacting the director of OARC at (517) 355-5030. The university has also established a toll-free hotline (800) 763-0764 that can be used to anonymously report known or suspected misconduct.

Back to Top