Office of the Controller: Departmental Accounting
Budget Manual
Budget Manual
Check Requests
Check Requests are used to issue checks for direct payment to a person or vendor when purchase orders or requisitions are not required. The University also provides a procurement card program that allows authorized employees to make business-related purchases under $1,500.
Complete Check Request instructions can be found by hovering your mouse over each field in the form.
To comply with IRS reporting regulations, ISU requires a form W-9 Request for Taxpayer Identification Number and Certification for all new vendors. The completed form can be faxed to (812) 237-8179 or attached to the check request.
Eligible Expenditures
The following are examples of expenditures that can be paid using a check request:
- Reimbursements to individuals - Should be limited as much as possible.
- To conform with IRS accountable plan purposes, all paperwork must be to our office within 60 days from the date in which the expense was paid.
- Misc payments to Employee and Students (see: Disbursement Guidelines for Misc Pay to ISU Employees and Students)
- Memberships*
- Services
- Pre-paid Registration Fees*
- Subscriptions*
- Freight charges*
- Critic Teachers
- Honorariums
- Medical Services
* These items are also eligible to be paid with a procurement card
Ineligible Expenditures
The following expenditures are ineligible to be paid with a check request:
- Alcohol*
- Holiday Items*
- Items considered personal in nature*
- Gift Cards
- Reimbursements for services paid by an individual. Services must be paid directly to the vendor by ISU.
- SERVICES RENDERED by Faculty, Staff or Students: For single payments to current ISU employees for services rendered outside of their current position, please use the One Time Pay Authorization Form. As of January 1, 2014, student employees cannot be paid via a One Time Pay Authorization form. All student employment should be routed through the Career Center.
- Items that are required to be paid on a procurement card
- Office supplies ordered from Guy Brown
- Postage
- Items that include the University's trademark, logo and/or symbol.
- Items that must be paid on a Purchase Order (For purchases that require a PO, please refer to Purchasing for additional information):
- Software
- Licenses
- Items that include the University’s trademark, logo and/or symbol if over procurement card limit
- Expenditures over your purchasing authority
- Computers, laptops, tablets, and printers over $400
*These items are restricted expenditures that cannot be incurred with University funds.
Attachments to Check Request
The Office of the Controller requires detailed supporting documentation to be attached to check requests. Examples of required documentation include vendor invoices and reimbursement receipts.
Hospitality form: The purchase of food or drink for an event or meeting requires the submission of a Hospitality Form.
Attachments are not mailed with the check. It is important that the Vendor Invoice Number column is filled out in depth. The information in this column will be printed on the check. Because we no longer mail attachments, this area will be the only information the vendor receives. If a vendor invoice number is not provided, a description of the payment will suffice.
Send the completed and signed Check Request along with detailed receipt(s) or invoice(s) to the appropriate person in the Office of the Controller. Send travel related check requests to the Travel Account Specialists, send grant related check requests to the Grant Account Specialist, and send all others to the Budget Coordinator. The documents will be imaged for audit purposes.
Fund Transfers
Intramural Voucher
The Intramural Voucher, hereafter referred to as an IV is used to move expense from one account to another or to charge expense to another department for services rendered. The IV normally originates from the supplying department but can originate from either department. The IV is also used to make corrections, within the department, to move expense from an Index or Account Code to the appropriate Index or Account Code.
- Example: You used your procurement card to pay for a membership and the expense posted to your default account code, which is for supplies (73050). This can be corrected with an IV that moves the expense from the supplies account code 73050 (credit) to the memberships account code 72600 (debit).
- Example: IV’s can be used to pay for internal expenses such as the rental of the Tilson Music Hall for an event.
Complete Intramural Voucher instructions can be found by hovering your mouse over each field in the form.
Budget Transfer Request
A Budget Transfer Request, hereafter referred to as a BA, should be used to move budget to a different account within an index or to a different index. All account codes should maintain positive balances at all times. If at any time a pool account code drops into a negative status, a BA should be completed to move budget from a pool account code with a positive balance to the pool account code with the negative balance. If additional expenses should occur in the deficient account code during the remaining fiscal year, you will need to transfer sufficient funds to cover the anticipated expenses. It is the responsibility of the department to send a transfer as soon as possible to cover any shortages.
The approving signature or signatures required for a BA is determined by:
- The amount of money being transferred
- The original budget location in respect to the destination of the transfer
For this reason account codes have been categorized as follows:
- 60040-66999 Salaries & Wages
- 67000-69999 Employee Benefits
- 70130-77599 Supplies & Expense
- 77600-78299 Repairs & Maintenance
- 78300-78999 Capital Outlay
Internal Transfers - Transfers within a supplies & expense category of the same index will require the signature of the Department Head.
Dean and Vice Presidential Transfer – Transfers from one department to another department must be signed by the Department Head, the Dean, and the Vice President. Additionally, transfers of salaries & wages expense, repair & maintenance expense, and capital expense require Department Head and Vice President signatures. The Dean's signature may also be needed, if directed.
Complete Budget Transfer Request instructions can be found by hovering your mouse over each field in the form.
Account Codes
Funds
A FUND number is used to identify the type of account. Fund numbers begin with an alpha character followed by five numeric characters. ISU’s fund types are as follows:
- Axxxxx Current Operating Funds
- Bxxxxx Bank Funds
- Dxxxxx Designated Funds
- Rxxxxx Restricted Funds
- Hxxxxx Auxiliary Funds
- Lxxxxx Loan Funds
- Qxxxxx Quasi- Endowment Funds
- Exxxxx Endowment Funds
- Pxxxxx Plant Funds
- Zxxxxx Agency Funds
Pool Account Codes
Pool Account Codes are account codes that hold the budget for several other account codes associated with it. Transfers can be made to and from other pool account codes, but expenses cannot be incurred in pool accounts.
Pool Account Codes can never be used for Deposits, Requisitions, Intramural Vouchers, or Check Requests.
Examples of pool Account Codes are:
| 60040 Admin. Salaries | 70500 Travel | 73300 Motor Vehicle |
| 64000 Bi-Weekly Salaries | 71500 Telecomm Exp | 77600 Repairs & Maint. |
| 65000 Student Wages | 72000 Printing | 78300 Capital Equip. |
| 70130 Personal & Cont. Service | 72500 Other Services | 81950 Budget Pool |
Budget appropriations are recorded in the above account codes and are distributed to the related account codes as expenses are incurred. For example:
Budget appropriations for total printing expenses are placed in 72000, the Total Printing pool account, but printing expenses are charged to the following:
- 72025- On-Campus Printing
- 72050- Off-Campus Printing
The 72000- Total Printing pool account code will be automatically reduced at month end for the amount of expenses charged to 72025 and 72050. These automatic entries will be represented by a document number that begins with "BP".
Account Codes
Account Codes identify the type of merchandise or service being purchased.
Complete lists of Banner Finance account codes can be found in the following files:
- Banner Finance Compensation Expense Account Codes
- Banner Finance Supplies & Expense Account Codes
- Banner Finance Revenue Account Codes
To view the account codes, click on the file name above. To download the file to your computer, click the link, download, and save file.
Field Codes
Field codes are used to indicate the type of transaction that occurred. They are found on the Detail Transaction Activity screen (FGITRND), which shows transaction detail for budget, year-to-date activity, or commitments
Field codes found in the Commitments column:
- "RSV" Encumbrance on a Requisition: Commitments are increased (+) when a requisition is applied, and decreased (-) when the requisition has been liquidated and a purchase order is issued.
- "ENC" Encumbrance on a Purchase Order: Commitments are increased (+) when a purchase order is applied, and decreased (-) when an invoice against the purchase order has been paid or when a purchase order is closed or cancelled.
Field codes found in the YTD Activity column:
- "YTD" Year to Date: When revenues are earned and expenses are incurred, they are applied to the YTD Activity column with the YTD field code. Activity from Intramural Vouchers, Journal Vouchers, Cash Receipts, Procard Feeds and Invoices will be found in this column.
- Revenue Account Codes: Revenues will be increased with a credit (+) and decreased with a debit (-).
- Expense Account Codes: Expenses will be increased with a debit (+) and decreased with a credit (-).
Field codes found in the Adjusted Budget column:
- "OBD" Original First Year Budget: The original budget is posted as an increase (+) with an OBD field code.
- "ABD" Adjusted Budget: Budget Transfer Requests adjust the original budget with the field code ABD. The adjustment can be an increase (+) or a decrease (-).
Accounts Payable
Accounts Payable
The Accounts Payable department ensures that all disbursements are made in compliance with University policies and procedures as well as federal and state standards. This includes identifying potentially taxable transactions and reporting them to the appropriate government agency. The department approves and/or processes disbursements for purchase order invoices and University purchasing card transactions.
Payment Methods
The following payment methods apply to the purchase of supplies, equipment and services:
- ISU Procurement Card: This is the preferential payment method for most purchases under $1,500. Procurement cards are issued by Purchasing & Central Receiving and the procurement card guidelines are enforced by the Office of the Controller. For more information regarding obtaining a procurement card, please visit Purchasing & Central Receiving.
- Requisitions/Purchase Orders: Requisitions are to be used for all purchases over $1,500. Requisitions are initiated by departments, approved by the Office of the Controller for funding availability and sent to Purchasing & Central Receiving for bid. Funds are then encumbered on a purchase order. Purchase order invoices are sent to Accounts Payable, where they are entered into Banner and electronically approved/disapproved for payment by the ordering department.
- Direct Payment: Check requests are used for direct payments to individuals or vendors when purchase orders have not been used and when the Procurement Card is not accepted. Please see Our Internal Site for instructions and guidelines.
Visit Purchasing & Central Receiving for complete purchasing policies and guidelines.
For payments for services, please review the 1099-MISC Guidelines for compliance with IRS regulations for payments to independent contractors.
Encumbrances
Encumbrances are reservations of funds for the purchase of goods or services. The encumbrance is established and changed by the creation or change of requisitions or purchase orders.
Invoice Approvals or Disapprovals
Invoices for purchases initiated with a purchase order are entered into Banner by Accounts Payable. The ordering department approves or disapproves the invoices or credit memos electronically. An approved invoice or credit memo authorizes the issuance of payment to the vendor. A disapproved invoice or credit memo re-opens the document and Accounts Payable will make adjustments if needed and resubmit for approval. To determine if an invoice is a credit memo, view the invoice on the Invoice/Credit Memo Query (FAIINVE) screen in Banner to see if the "Credit Memo" box has been checked.
Purchase Orders, Change Order & Requisition FAQ's
How can I change the index and/or account code on a Purchase Order?
If a change of index and/or account code is needed on a purchase order, email ISU-AccountsPayable@uupt.net and provide the purchase order number and information that needs changed.
How do I find the balance of a purchase order?
To find the balance of a purchase order, use the Detail Encumbrance Activity (FGIENCD) screen in Banner.
How do I distinguish a credit memo from an invoice?
To determine if an invoice is a credit memo, view the invoice on the Invoice/Credit Memo Query (FAIINVE) screen in Banner to see if the "Credit Memo" box has been checked.
Who do I contact about closing or cancelling an open requisition or purchase order?
If invoicing has not occurred against the purchase order or requisition, it can be cancelled using the Purchase Order Change Request (FZAPOFU) screen in Banner. Refer to the instructions available on the Purchasing website. If there has been invoicing activity against the purchase order, contact ISU-AccountsPayable@uupt.net to close the requisition or purchase order.
How do I increase a purchase order?
To increase a purchase order, a change order will need to be processed using the Purchase Order Change Request (FZAPOFU) screen in Banner. Refer to the instructions available on the Purchasing website. A Budget Transfer cannot be used to adjust a purchase order.
For all other purchase order, change order, merchandise return, or requisition questions, please contact Purchasing & Central Receiving.
Property Accounting
Property Accounting
The Property Accounting guidelines have been established to assist University personnel in accounting for and preserving the institution’s property, plant, and equipment. Adhering to these guidelines is in the best interest of the University as it aids in ensuring the accuracy of our asset inventory valuation and depreciation expense for Financial Statement purposes and ensuring the proper levels of insurance coverage for the University’s assets.
Asset Classifications
Asset Classifications
- Capital Equipment
Equipment is considered capital equipment if it meets all of the following characteristics:
- Unit cost of $5,000 or more unless it will be permanently attached to, installed in, or used with other components that raise the total dollar value to $5,000 or more
- Useful life of more than one year
- Moveable: not a permanent fixture or part of a building
- Exception: Art objects purchased at any cost from the artist or a reputable art dealer will be considered capital
Non-Capital Equipment
Equipment with an acquisition value of less than $5,000 will not be capitalized but may still be tagged and
tracked for user and location information. Exception items considered non-capital equipment that are still
tagged include the following:
- Desktop computers, laptop computers, and tablets (you have to receive Office of Information Technology approval)
- Printers with an acquisition value of $400 or more
- Firearms
- Licensed Vehicles (Cars, Trucks, Trailers, Utility Vehicles, etc.)
- Equipment purchased with grant funds where the grant may require items with an acquisition value of less than $5,000 be tagged and tracked
Property Accounting Responsibilities
Property Accounting Responsibilities
It is the combined responsibility of Property Accounting and departmental custodians to ensure the accountability for capital and non-capital (exception item) equipment when it becomes the property of Indiana State University. Property Accounting performs the following functions:
- Creates and maintains the official permanent asset record for capital equipment and non-capital equipment exception items:
- Equipment Acquisition: Equipment can be acquired by the University in the following ways:
- Purchased through ISU Purchasing Process: Equipment can be purchased by the University by using a Purchase Order, Check Request or a Procurement Card. Property Accounting runs an extract report on a weekly basis that downloads all equipment purchased using the equipment account codes. These items are reviewed and a tag number is assigned to each if it is considered capital equipment or a non-capital equipment exception item. If an item is considered capital equipment, it is capitalized in the Fixed Asset System. If an item does not meet the criteria of capital equipment and it is not an exception item, it is moved to the appropriate expense account code using a journal voucher.
- Gifts: Assets can be acquired as a gift to the University. The department receiving the gift is required to report this through a Equipment Gift or Loan Report. Property Accounting relies on the expertise of the receiving department to determine the value of the asset given. These assets are given a gift code (GF) within the Fixed Assets System. At year-end, a list of gifts from the ISU Foundation is also obtained to reconcile with the Fixed Asset System to ensure all gifted assets have been recorded.
- Tagging New Assets: Property Accounting assigns a unique tag number to each unit of capital and non-capital exception item equipment and physically tags the item with a barcoded tag. When the item is tagged, Property Accounting obtains information regarding the item’s location, user, and serial number and updates the Fixed Asset System record.
- Equipment Acquisition: Equipment can be acquired by the University in the following ways:
- Facilitates the annual inventory verification process and conducts physical inventories of University assets.
- Inventory Cycle: Inventory is conducted on a department-by-department basis. The inventory cycle is a four (4) year cycle. Each department is assigned to one of four groups. Each group will have a physical inventory conducted every four (4) years and will be required to complete an inventory verification at the midpoint between their next physical inventory.
- Inventory Verifications: Inventory verification reports are issued to each department scheduled to receive a report at the beginning of the fiscal year. The reports contain a listing of all capital and non-capital exception items for which the department maintains custodial responsibility as well as a memo with instructions for completing the report. The departments verify the existence of the equipment, make updates for location and user changes, and list any additional equipment items not listed on the report. The completed Inventory Verification report is approved by the department Chairperson/Director and returned to Property Accounting. Property Accounting updates the equipment data and follows-up with the department if discrepancies exist.
- Physical Inventories: Property Accounting conducts a physical inventory for each department every four (4) years. All Federally-purchased capital and non-capital exception item equipment is inventories every two (2) years. Other inventories are conducted on a periodic basis, which could be due to failure by a department to return an Inventory Verification, a location change of a department, at the request of a department, or other circumstance that warrants a physical inventory.
Departmental Responsibilities
Departmental Responsibilities
Departments have a responsibility to ensure the safeguarding of equipment and that accurate inventory records are maintained. It is recommended that each department identify a specific individual as the department property administrator who is responsible for completing Inventory Verifications and acts as the main point of contact between the department and Property Accounting. Departmental custodial responsibilities are as follows:
- Provide adequate safeguards to ensure the prevention of loss, damage, or theft of the equipment. Any loss, damage, or theft should be investigated and immediately documented with a Loss and Theft Report within 24 hours of discovery. The Loss and Theft Report notifies Public Safety, Property Accounting, and Risk Management.
- Report changes and maintain records for the location and users of equipment. Changes reported include the transfer of equipment to another department (using the Transfer Notice form or other off-campus location (using the Request for Use of Equipment Off-Campus form.)
- Dispose of equipment through Purchasing and Central Receiving by following established procedures (See Disposal of Equipment). The Director of Purchasing is the official "Disposal Agent" of University-owned property, with the exception of works of art. The University Curator’s Office should be contacted to dispose of unwanted works of art. Departmental sale, disposal, or donation of University-owned property outside of the Purchasing and Central Receiving process is prohibited.
- Submit the annual Inventory Verification report within the timeframe requested by Property Accounting. The department’s property administrator should verify the existence of each inventory item and report necessary changes. Inventory verifications should be approved by the department Chairperson/Director before submitted to Property Accounting.
- Report gifts received to Property Accounting by submitting a Equipment Gift or Loan Report
Disposal of Equipment
Disposal of Equipment
The disposal, sale, or donation of University-owned equipment or goods that are no longer of use to the custodian must be directed by the Director of Purchasing and Receiving who acts as the official "Disposal Agent" for the University. Purchasing and Receiving can be advised of unwanted property through the Surplus Pickup Request System
Inventory Verification Process
Inventory Verification Process
If a department is scheduled to receive an Inventory Verification report, it will be issued at the beginning of the fiscal year. The reports contain a listing of all capital and non-capital exception items for which the department maintains custodial responsibility to verify its existence and report necessary changes. The process for Inventory Verifications is as follows:
- Verification reports and instruction memo issued after the beginning of the fiscal year.
- Departments have 60 days from the report issuance date to verify the existence of their capital equipment and non-capital equipment exception items, complete the report, and return it to Property Accounting. Inventory Verification reports must be approved by a department Chairperson/Director.
- Property Accounting will review the completed Inventory Verification report and make necessary updates in the Fixed Asset System. Property Accounting will follow up regarding items reported missing by the department property administrator and by possibly doing an independent physical verification. Items reported missing that cannot be found by Property Accounting will require the completion of a Loss and Theft Report
- After Property Accounting is satisfied with the completion of the Inventory Verification and has followed up regarding missing items, an updated listing of equipment will be provided to the department for their records.
If a department fails to complete an Inventory Verification within the required time frame, the department Chairperson/Director will be notified and Property Accounting may schedule a physical inventory.
Capital Equipment Account Codes
Capital Equipment Account Codes
All non-capital equipment exception items should be coded to account code: 73610.
78360 - Office Equipment and Furniture - Non-computer office equipment and furniture used for faculty and administrative purposes ($5000 or more)
78370 - Instructional and Lab Equipment - Moveable, non-computer instructional and lab equipment ($5,000 or more)
78400 - Art Objects - Works of art purchased from artist or art dealer (any cost)
78510 - Computer Equipment- Instructional Use - Computers and related equipment used for instruction in classes and labs ($5,000 or more)
78520 - Computer Equipment- All Other Uses - Computers and related equipment used for faculty and administration purposes ($5,000 or more)
78530 - Computer Equipment- LAN/Network - Computers and related equipment purchased to be used in campus networking ($5,000 or more)
78550 - Computer Software Equipment - Purchase of commercially available computer software ($5,000 or more)
78605 - Telecommunications Equipment - Equipment related to University-wide communications ($5,000 or more)
78620 - Household and Custodial Equipment - Equipment purchased by Facilities Management or Housing and Dining for custodial use ($5,000 or more)
78630 - Athletic Equipment- Intercollegiate - Athletic equipment purchased by Intercollegiate Athletics only ($5,000 or more)
78650 - Media Equipment - Audio-visual equipment ($5,000 or more)
78655 - Musical Instruments - Musical instruments ($5,000 or more)
78660 - Research Equipment - Equipment purchased for research purposes ($5,000 or more)
78680 - Firearms - Firearms (any cost)
78690 - Other Equipment - Non-computer equipment that doesn’t fall into another category ($5,000 or more)
78716 - Vehicles and Machinery - Vehicles and moveable machinery ($5,000 or more)
78790 - Library Books and Periodicals - Purchases of library books and periodicals for the University Library collection (any cost)
Capital Project Capitalization Guidelines
Capital Project Capitalization Guidelines
Capital projects include building construction and renovation, land improvements, and infrastructure projects. Generally, capital projects will be capitalized if the project costs are $100,000 or more, unless the costs are related to a major renovation. An example of a major renovation under $100,000 would be the replacement of a roof or the renovation of an elevator in a building. Interest costs incurred during building construction or renovation are also capitalized as a cost of the building or renovation.
Capital Project Account Codes
78840 - Land Improvements - Improvements that have a useful life exclusive of land or buildings, such as parking lot improvements, landscaping, and athletic field improvements
78850 - New Building Construction- General - Direct expenses for the construction of new buildings, such as materials, labor, overhead, and building permits
78860 - Building Rehab and Renewal - Direct expenses for the renovation of existing buildings, such as materials, labor, overhead, and building permits
78870 - Infrastructure - Improvements to land that have a useful life exclusive of land or buildings, such as pedestrian walkways, irrigation, and lighting improvements
Land Capitalization Guidelines
Land Capitalization Guidelines
All expense incurred to obtain land and prepare it for its intended use is capitalized. Expenses incurred to prepare land for its intended use could include demolition costs, legal fees, realty fees, etc.
Land Account Code
78830 - Land - Direct costs incurred to obtain land and costs incurred to prepare it for its intended use, such as demolition, legal fees and realty fees
Demolition Capitalization Guidelines
Demolition Capitalization Guidelines
- Costs to demolish an existing building or structure which resides on newly acquired property are capitalized if the intent to demolish existed at the time of acquisition. These demolition costs are included in the cost of the land if the cost equals or exceeds $100,000.
- If a new building or structure is constructed to replace an old one, then these demolition costs are included in the cost of the new building rather than the cost of the land if the cost equals or exceeds $100,000.
- If the intent to demolish a building or structure did not exist at the time of acquisition, then future demolition costs are expensed.
Leasehold Improvement Capitalization Guidelines
Leasehold Improvement Capitalization Guidelines
Costs of building modifications and installation of permanent equipment that is considered part of the leased structure are capitalized. These costs are amortized over the useful life of the shorter of the following periods: (1) the useful life of the assets, or (2) the (remaining) lease term at the date the improvements are available.
Routine Repairs & Maintenance vs. Major Repairs
Routine Repairs & Maintenance vs. Major Repairs
Some repair projects, if large enough in scope and cost, may be considered major repairs and therefore capitalized rather than expensed. If major rework or maintenance is scheduled and estimated costs are $100,000 or more, please check with Property Accounting for guidance about the proper account codes to use when creating a requisition. If maintenance and repairs are routine (most are) then 77650- Equipment Repairs or 78010- Building Repairs can be used.
Procard
Procard
All information about ProCards can be found on our internal website.
The Procurement Card (Procard) is a University credit card that delegates small-dollar purchasing power to individual employees. The Procard permits purchases to be made with minimum delay and minimum clerical labor, while also providing accountability. The Procard allows the cardholder to charge work-related expenses directly to the University. This policy describes the proper use of a University procurement card. The procedures established here also serve to protect the University from fraud and other misuse of its funds.
Procurement cards are jointly managed by the Office of the Controller and the Purchasing and Central Receiving Department. Purchasing and Central Receiving manages the issuance of Procards and the contract with the card provider, while the Office of the Controller maintains the record keeping responsibility. The procurement card application and instructions can be found here.
A complete list of cardholder responsibilities, including all rules and procedures, security measures to prevent fraud, and a list of restricted vendors and unauthorized purchases, can be found on the Purchasing and Central Receiving web site.
Procurement Card Basics
Billing Cycle
The Procurement Card billing cycle is a monthly period from the 16th of one month to the 15th of the next month.
Changing the Default Account
All Procard purchases will be charged to the default index and account code listed on your original Procard application. If you should need to change the default index and/or account code on your Procard, please e-mail ISU-Procard with the following information:
- Department name
- Name on procard
- Old index and account code
- New index and account code
Activating Your Procard
A sticker can be found on the Procard that lists an 800 number, which can be called to activate the card. You will need to provide some personal information during the call. The card must be activated before purchases can be made.
Deactivating Your Procard
If you are deactivating your Procard, follow these procedures:
- Cease using the Procard 7-10 business days prior to deactivation
- Take your Procard to the Purchasing Department
- Complete your final Procard records and submit them to the Procard Auditor
The above procedures should be followed whether you transferring, terminating, or you simply no longer need the card.
Lost or Stolen Procurement Cards
Procedures for a lost or stolen procurement card can be found in Purchasing's Procurement Card Guide.
Cardholder Responsibilities
It is the responsibility of the cardholder to maintain records of Procurement card purchases and to submit monthly expense reports in a timely manner. Documentation requirements and procurement card reconciliation procedures are detailed below.
Documentation Requirements
Cardholders should always obtain an itemized vendor receipt or invoice for each transaction. If a cash register tape does not have descriptions, they should be written on the tape. If an itemized vendor receipt or invoice is missing, the cardholder should contact the vendor to obtain a copy. If the vendor cannot or will not issue a receipt or invoice, the cardholder should contact the Procard Auditor to complete a missing receipt/invoice report and get all appropriate signatures. If a cardholder consistently has a problem obtaining all original itemized receipts or invoices, their cardholder privileges will be reviewed and possibly revoked.
- Itemized Vendor Receipt/Invoice: Is defined as an original invoice, original cash register receipt, original sales slip, or original packing slip which contains an itemized list of goods purchased, with dollar amounts, and the name and location of the supplier. An employee of the supplier must sign handwritten receipts.
- Internet Purchases: At least one of the following types of documentation is required:
- Original itemized invoice or packing slip
- Printout of the online order confirmation
- Printout of the e-mail confirmation
- Printout of the completed online order form
Sales Tax: Indiana State University is exempt from sales tax. Indiana state sales tax charges should not be accepted on Procard purchases by the cardholder. The University’s tax exemption number can be found inside the front cover of the pocket guide that was given with your card. You, as the cardholder, need to be sure that the vendor does not charge sales tax. The University is NOT exempt from all types of taxes (ex. Food and Beverage Tax). We are only exempt from sales tax.
Reconciliation Requirements
Procurement cardholders are responsible for completing a monthly expense report and submitting that report to the Procurement Card Auditor within 30 days of the end of the billing cycle (the 15th of each month).
- Expense Reports: This report is your credit card statement. This report contains transactions, purpose of purchases, and fields for cardholder and reviewers signatures. Expense Reports can be printed from the SDG2 webpage.
- Reconciliation: It is the cardholder’s responsibility to reconcile all purchases with the expense report. Any discrepancies are the cardholder’s responsibility to correct by contacting the vendor within 30 days of the end of the billing cycle.
- Purpose of Purchase: The purpose of the purchase must be provided to determine compliance. The purpose can be entered using the SDG2 site (See Online Tools) in the field “Expense Description” found in Transaction Summary under the Account Activities tab. This should not be a list of what was purchased or a person’s name, but rather why the purchase was made.
- Departmental Reviewer: The department reviewer should be the department head or someone he/she designates to be the reviewer of the cardholders. The departmental reviewer should be someone that is financially qualified to understand the reason for the purchase and knows whether the purchase is for the department’s benefit. The departmental reviewer will be responsible for seeing that the reconciliation of the Expense Report is correct.
- Approvals: Both the cardholder and the departmental reviewer must sign and date the Expense Report. By signing the report, the cardholder and departmental reviewer are ensuring all transactions are for University purposes only.
- Submit Records to the Auditor: After Expense Reports and itemized vendor receipts are reconciled by the cardholder and reviewed by the Departmental Reviewer, they should be turned into the Procurement Card Auditor within 30 days of the end of the billing cycle. It is recommended that these records be hand-delivered to the assigned drop-off area in the Office of the Controller. NOTE: These records become permanent records within the Office of the Controller, and we recommend making copies for your records.
Procard Audits
All Procurement Card transactions will be audited by the Procurement Card Auditor. The Internal Auditor of the University or the State Board of Accounts (state auditors) may select a number of cardholders to audit for compliance with transaction and record keeping policies and procedures. Procurement Card auditing procedures are established to verify that the Procurement Card is being used appropriately by the cardholder and that the cardholder and the department are maintaining the records.
Procurement Card violations and violation guidelines are described below. The goal of these guidelines is not to punish cardholders or terminate cards, but to ensure the University’s policies are followed. The Procurement Card Administrators will make every attempt to assist the cardholder and supervisor in following the policies and keeping the departmental cards active. It is ultimately the department’s responsibility, however, to make sure the University’s policies are followed.
NON-CRITICAL VIOLATIONS
The following Procurement Card violations are considered “non-critical”, and may result in card suspension if deemed excessive (six months, within a fiscal year, of having at least one non-critical violation will result in a critical violation):
- Late expense reports
- Incomplete/late business purpose for a transaction*
- Failure to notify vendor of tax-exempt status/failure to dispute sales tax charge*
- Missing Required Forms (Logo Approval, Hospitality or Distribution of Prizes and/or Awards, if needed)*
*Violations that require correction.
CRITICAL VIOLATIONS
The following Procurement card violations are considered “critical”:
- Use of the Procurement Card for personal purchases*
- Missing receipts/undocumented purchases*
- Not reporting a lost or stolen Procurement Card immediately
- Allowing another person to use your Procurement Card
- Use of Procurement card for purchases found on the “Restricted Transactions” list
- Excessive non-critical violations (six months, within a fiscal year, of having at least one non-critical violation will result in a critical violation)
- Splitting purchases to get around maximum purchase limit
*Violations that require correction.
Critical violations will be handled as follows:
- 1st Violation- Written warning with notice to correct violation within one week. If violation is not corrected within that time, the supervisor will be contacted and the cardholder’s limits will be lowered to $1 until corrected.
- 2nd Violation- Written warning with notice to correct violation within one week. If violation is not corrected within that time, the supervisor will be contacted and the cardholder’s limits will be lowered to $1 until corrected.
- 3rd Violation- The supervisor will be contacted and it may result in the requirement of additional training or suspension of the Procurement Card.
Online Tools
Smart Data Generation 2 (SDG2) is the online tool provided by JPMorgan Chase for management of procurement card accounts. SDG2 gives cardholders access to:
- Procard transactions for the last 24 months
- Transaction limits
- Billing address on file
- Printable Procard Expense Report
- Approval of expenses
- Capability to change accounting for expenses
- Capability to input the purpose of the purchase
All cardholders are required to access this site on a weekly basis to make the necessary transaction updates.
Please review the Cardholder Quick Reference Guide for SDG2 for training information before accessing the site for the first time.
If you have technical problems with the site, please contact ISU-Procard@uupt.net