Home > Corporate > Finance and Informatics > Chapter 12 - Non-Public Funds Credit Cards (Revised 17 Aug. 07)
Chap 12 Credit Cards
Public Funds Aquistion Card - General
Public Funds Aquistion Card - Requesting
Public Funds Aquistion Card - Reconfirmation/Recall
Cancellation of an Aquisition Card
Government of Canada Designated Travel Card (DTC)
NPP Corporate Credit Card (NPPCCC)
NPPCCC - Emercency/Temporary CC Limit Increases
NPPCCC - Card Holder Responsibilities
NPPCCC - Reconfirmation/Recall
NPPCCC - Base Card Administrator Responsibilities
NPPCCC - Card Administrator Responsibilities (DAPO)
NPPCCC - Banking Institution CC Reports
NPPCCC - Non-Standard CC Transactions
CHAPTER 12
GENERAL
1. The use of credit cards to facilitate purchase and payment of goods is now a generally accepted practice and has become widespread.
2. The intent of this chapter is to provide some background on each of the available cards, the rules for obtaining and using the credit cards, and to either outline the controls for the expenditures that are appropriate for each of these cards or to provide a source for that information.
3. Non-Public Fund employees have access to three separate and distinct credit cards to assist them in carrying out their duties. These credit cards are:
a) the Public Funds Acquisition Card;
b) the Government of Canada Designated Travel Card (DTC); and
c) the NPP Corporate Credit Card (NPP CCC).
GENERAL
4. Some Personnel Support Program (PSP) Non-Public Fund employees are responsible for not only Non-Public budgets, but also Public budgets. In many cases, these NPF employees hold public funds Acquisition Cards to assist them in the performance of their duties. The acquisition card is a commercial credit card issued under a contract between a credit card provider and the Government of Canada for the procurement and payment of goods and services. The use of acquisition cards simplifies the process for procuring and paying for goods/services by offering significant savings in reducing or eliminating non-value-added activities within the purchasing and expenditure management process.
5. Guidance relative to the Acquisition Card is contained in Financial Administration Manual (FAM) Chapter 1016-7-1. The FAM contains the following topics:
a) overview;
b) types of cards;
c) responsibilities;
d) requesting an acquisition card;
e) issuing and renewing an acquisition card;
f) using an acquisition card;
g) Internet use;
h) Cancelling an Acquisition Card;
i) references
j) Annex A to FAM 1016-7-1 – Request for a Standard Acquisition Card and Acknowledgement of Responsibilities and Obligations;
k) Annex B to FAM 1016-7-1– Request for a Corporate Acquisition Card and Acknowledgement of Responsibilities;
l) Annex C to FAM 1016-7-1– Assignment of contracting authority to a Corporate Acquisition Cardholder;
m) Annex D to FAM 1016-7-1 – Corporate Acquisition Card – Master Control register;
n) Annex E to FAM 1016-7-1– Corporate Acquisition Card – Event Register
o) BMO MasterCard Acquisition Card – Employee Account Request Form; and
p) CIBC – Government of Canada Purchasing Card – Cardholder application Form.
6. Those NPF employees exercising expenditures on public funds budgets and requiring an acquisition card to assist in that process are required to complete the Form “Request for a Standard Acquisition Card and Acknowledgement of Responsibilities and Obligations”, found in Annex A to FAM 1016-7-1 and Annex A to this chapter. Requests should be sent to local Base/Wing/Unit Public Fund Acquisition Card Coordinators.
7. Public Fund Acquisition Cards are subject to reconfirmation verification by Division Heads, Base Commanders or delegated authorities; this will establish the continued requirement and re-confirm the cards expenditure limits. Where the business activity is deemed to be inadequate, these cards should be recalled.
CANCELLATION OF AN ACQUISITION CARD
8. An acquisition card shall be cancelled when one of the following situations occurs:
a) the card is no longer required;
b) the cardholder leaves the organization;
c) the card is lost or stolen; or
d) the card has been compromised in any manner.
GOVERNMENT OF CANADA DESIGNATED TRAVEL CARD (DTC)
9. The purpose of the card is to provide a cost effective and convenient method of paying for official government travel expenses. NPF employees are entitled to request and use the government-sponsored designated travel card. Guidance relative to the DTS is contained in Financial Administration Manual (FAM) Chapter 1016-7-3.
10. The travel card is intended to cover expenses related to temporary duty travel while away from the member’s employment location such as but not limited to and in accordance with the NPP Travel Directive:
a) Commercial lodgings
b) vehicle rentals and related expenses
c) meals; and
d) cash advance requirements
11. The DTC is a government corporate card meaning that misuse and delinquencies cannot be tolerated. It is a cardholder responsibility to ensure timely reimbursement to the credit card company. For accounts that become delinquent over 90 days and/or cards that are being misused, National Defence will initiate recovery from the employee and additional administrative action up to and including dismissal, if warranted.
12. If you require a Government Designated Travel Card, complete the application form “Request for American Express Designated Travel Card” found in Annex A to FAM 1016-7-3 and Annex B to this chapter. The manager authorizes the expenditures limits, and sends the completed form to the BCompt at Base/Wing/Unit or CFO/Building Services Assistant for CFPSA HQ employees.
13. A DTC shall be cancelled when an NPF employee no longer is employed by Staff of the Non-Public Funds, Canadian Forces, if the employee is taking an extended leave without pay for period greater than 6 months, or the card is no longer required.
NPP CORPORATE CREDIT CARD (NPP CCC)
GENERAL
14. The use of the NPP Corporate Credit Card (NPP CCC) by authorized personnel, will make the purchase of certain items more efficient and reduce the requirement to secure and carry cash. The NPP CCC can also be used for the purchase of merchandise for resale. These cards will eliminate the requirement to hold petty cash funds and/or significantly reduce the value of petty cash funds. Petty cash funds will only be required for those cases where the item being purchased is of very low value and the vendor has a threshold amount for a purchase, under which credit cards are not accepted.
15. Since NPP has its own CCC, the use of individual personnel credit cards for NPF purchases is not allowed. Only emergency purchases will be reimbursed if done via a personnel credit card, if there is no individual within the NPF entity that has a NPP CCC.
16. The NPP CCC will be issued in the name of the individual holder and is only to be used by the cardholder. Holders will be expected to guard these as they would their own personal credit cards and to afford them the same security as they would afford to cash.
17. Similar to petty cash purchases, PST is normally paid. Most suppliers do not accept the PST exemption number or certification (see A-FN-105, Chapter 8, Annex A, Appendix 1) on such purchases. Where PST is paid, it will be included in the cost of the purchase. Quebec Sales Tax (QST), the Harmonized Sales Tax (HST) in Newfoundland, Nova Scotia and New Brunswick, and GST in all provinces will be paid and claimed per normal procedures for all credit cards.
REBATE BY BANK OF MONTREAL TO CFPSA
18. Effective fiscal year 2007/2008, the financial institution that issues the Corporate Credit card, Bank of Montreal, will issue a rebate on a quarterly basis to the Canadian Forces Personnel Support Agency. This rebate will be forwarded to the Non-Public Property entities that use the NPP CCC on a prorated basis. The more the card is used by authorized personnel, the greater the rebate for a Non-Public Property entity.
19. As with petty cash and change funds, NPP CCC is issued on the written authority of the appropriate delegated authority outlined in the Delegation Instrument.
20. In order to obtain an NPP CCC, the applicant must complete the application form held at the local Non-Public Funds Accounting Office or found at Annex C, have spending limits authorized as per paragraph 21, and forward to Base Card Administrator.
RESTRICTIONS – LIMITS AND USAGES
21. There is a transaction, daily and monthly card limit for each card. Credit Limit Tables have been established and can be found at Appendix 1 to Annex C. Requirements for higher limits must be justified and approved in accordance with the NPP Delegation Instrument.
22. The NPP CCC is to be used primarily for expense items and the purchase of merchandise for resale. The card may be used for other items when it is not practical to pay by cheque or through the normal invoicing procedures. The card may be used for the purchase of merchandise for resale but not to pay salaries/commissions where there are T4/T1204 implications. When used to purchase merchandise for resale, the normal purchasing accountability procedures outlined in Chapter 21 must be followed. When used to purchase fixed assets, the normal accountability procedures outlined in Chapter 28 must be followed.
23. Card holders are prohibited from using the card for personal expenses of any kind. Any violation will result in immediate cancellation of the card and may result in disciplinary action.
24. On a monthly basis, the Base Card Administrator will ensure that all individuals have submitted a Corporate Credit Card Expenditures Recap. If an individual is negligent of submitting the Expenditure Recap on timely basis, then the Base Card Administrator can request the Card Administrator to temporarily suspend the CCC.
25. Any fraudulent expenditure will be investigated and charged to the individuals ME record. The Base Card Administrator will notify National Accounts Receivable Office of action taken.
EMERGENCY/TEMPORARY CREDIT CARD LIMIT INCREASES
26. There may be occasions where an emergency/temporary limit increase is warranted. These emergency increases must be documented and supported by the approving authority, and must be for a finite period, with an indicated expiry date. The Card Administrator is to ensure that these temporary limits have a short-term expiry date.
27. The NPP CCC user shall:
a) Read the section and sign the “Acknowledgement of Responsibility for a Corporate Credit Card” (Appendix 2 to Annex C) which will be kept on file at National Accounts Payable Office (NAPO);
b) Obtain a sales slip/voucher for each expenditure made with the purchase card;
c) Monthly, upon receipt of the NPP Corporate Credit Card Statement from the Banking Institution, the user shall complete a Corporate Credit Card Expenditures Recap (Appendix 3 to Annex C) including the proper GL account coding and return to the local NPF accounting office in a timely manner;
d) As part of completing the Recap, the Credit Card Bank Statement must be reviewed. Any charges that have been made in error must be clearly annotated on the statement;
e) Corporate Credit Card Expenditure Recap should reference any minute/memo authority, must be signed by the appropriate approving authority and be submitted to the Base Card Administrator (in a timely manner) along with the Credit Card Bank Statement and all supporting sales slips/vouchers for input to ABACIS, as part of the month-end process;
NOTE
The user will not make any payment on the NPP CCC. Payment is made by Canadian Forces Personnel Support Agency/Finance Division through NAPO.
f) Notify the Card Administrator through the Base Card Administrator when there is a change to the information provided on the original application form (eg. Name, address, etc );
g) Should the standard card transaction limits detailed above be inadequate, a request for a change must be forwarded to the Base Card Administrator with proper approval authority who will contact the Card Administrator (note that limits may be temporarily increased when required);
h) Return the card to the Base Card Administrator who will advise the Card Administrator and ensure it is destroyed when it is no longer required (eg. The card holder is transferred or otherwise leaves the position) or when ordered to do so by the approving authority or the Card Administrator; and
i) Immediately report lost or stolen cards to the Card Administrator through the Base Card Administrator as well as to the appropriate Banking Institution listed at Annex D. The bank will cancel the missing card and issue a replacement card.
28. The NPP CCC Cardholder shall:
a) Not use the card for any purpose, or in any manner, not authorized by proper authority; and
b) Not make any personal expenditure with the card.
29. NPP CCC is subject to reconfirmation verification by Division Heads, Base Commanders or delegated authorities. This will establish the continued requirement and re-confirm the cards expenditure limits. Where the business activity is deemed to be inadequate, these cards should be recalled.
RESPONSIBLITIES OF THE BASE CARD ADMINISTRATOR
30. The NPFAS or equivalent is designated the Base Card Administrator for their Base/Wing. As the card administrator, he/she shall:
a) Receive minute/memo authorizations for issue of card(s) as per the NPP Delegation Instrument;
b) Forward applications for new cards to Card Administrator as well as cancelled/returned cards to the Banking Institution.
c) Receive new cards from the Banking Institution and issue them to the authorized holders;
d) Brief the cardholders on their responsibilities as detailed in this policy and obtain and forward a signed copy of the “Acknowledgement of Responsibility for a Corporate Credit Card” to the Card Administrator. The cardholders ABACIS ME record must be annotated indicating that the individual holds a NPP Corporate Credit Card;
e) Based on information received from the cardholder to the Base Card Administrator, the Base Card Administrator will inform the Card Administrator of the cardholder’s issue. The Card Administrator will liaise between the cardholders and the Banking Institution concerning any changes concerning cardholders (additions/deletions), cardholder information, or card limits. The Card Administrator will provide the changes, in writing, to the Banking Institution at the telephone number or address listed at Annex D:
f) In addition to annotation of the cardholders ABACIS ME record, the Base Card Administrator will ensure that the issue of the purchase card is indicated on the employee’s Personal Liability and Clearance Card (PLCC), if such a system is in place at the unit. This will ensure that the card is returned when employment ceases;
g) For each card requested/issued, pass a copy of the application for new cards, any changes in card holder information, as well as the card account number, and all minute/memo authorization for issue to the Card Administrator; and
h) Notify the Card Administrator, in writing, of all changes of Base Card Administrator.
31. The Base Card Administrator shall ensure the following:
a) The card holders are forwarding their monthly NPP CCC statements, along with all applicable source documents including the Recap (properly approved for payment) on a timely basis;
b) Review all documentation to ensure that it has been reconciled by the card holder;
c) Report any disputed charges, that have been highlighted on the statement, to the Banking Institution contact as per Annex D; and
d) Enter the amounts payable according to the Credit Card Bank statements (including any charges made in error) as follows:
Example:
The Banking Institution statement shows $100 in valid charges and an incorrect $20 (i.e. the cardholder did not make the latter expenditure). There is a total of $18 HST charge, of which $3 is applicable to the error.
DR Outlet Expense $100
DR A/Rec NPP CCC 23
DR A/Rec HST 15
CR A/Pay NPP CCC $138
Note that the Debit and the Credit relating to the incorrect charge are posted to two separate accounts and not netted as a credit of $115 in A/Payable. This will allow the charges made in error to be monitored and tracked. In addition, there should be a separate entry made for each statement submitted, rather than one total for all statements. The A/Payable is to be set up as an SU account to be named “Purchase Card ““SU 4110000”. The A/Receivable is to be set up as CU account to be named “Purchase Card “.
RESPONSIBILITIES OF THE CARD ADMINISTRATOR
32. The Director Accounting and Payroll Operations or delegate (DAPO) will be the Card Administrator and shall:
a) Maintain an ACCESS database up-to-date with card holder information as provided by the Base Card Administrator and conduct an annual verification of the data with the Banking Institution list;
b) Ensure that the following information is obtained for each card holder:
1. Name
2. ME Number (if the ME number is not in ABACIS, then ME record must be created).
3. Work Location
4. Work Telephone Number
5. Home Address
6. Home Telephone Number
c) Receive the various detailed reports from the Banking Institution and review those reports to ensure compliance with the card restrictions;
d) Maintain a file, for each card issued, containing the issuing authority minutes/memo, the card application, the Acknowledgement of Responsibility for a Corporate Credit Card and any changes to the card holder'’ information.
e) reconcile card holders of record between Bank lists and ACCESS list;
f) Act as the national liaison between the Banking Institution and the card holders for disputed charges, errors and chargebacks using the address and numbers provided above;
33. Travel expenses should not be charged on the NPP CCC since there is an appropriate card, the Designated Travel Card. In an emergency, where it becomes necessary to use the NPP CCC for travel expenditures, the following guidelines should be observed:
a) Vehicle Rentals – because the NPP CCC does not provide Collision Damage coverage, if at all possible, a person holding a Designated travel Card should rent the vehicle as this coverage is part and parcel of this package. Although NPF employees are covered under the Consolidated Insurance Program (CIP) for collision damage, there is a $5,000 deductible, therefore, it advantageous to utilize the Designated Travel Card rather than the NPP CCC;
b) Meal Rates – if a meal is to be charged to the NPP CCC, the NPP Travel Directive approved rates cannot be exceeded. Special events that may incur greater rates than the NPP Travel Directive approved rates must be approved in advance by the cardholder’s manager.
c) Accommodation/Hotel Rates – Commercial accommodation should not exceed the NPP Travel Directive guidelines even if charged on the NPP CCC on an emergency basis; and
d) Claims should be annotated to substantiate the use of the NPP CCC.
34. Managers – The outlet managers must as a minimum:
a) establish a viable maximum limit for his/her outlet;
b) initiate a periodic review of expenditure totals to compare usage to credit limits;
c) verify the Summary and Statement, presented with the Credit Card vouchers for authorization, to ensure that all expenditures are legitimate expenditures relative to the outlet’s role; and
d) approve all NPP CCC expenditures prior to sending to the Accounting staff for payment.
35. Accounting Staff – The Base/Wing/Unit staff must as a minimum:
a) ensure that all submissions for payment are duly authorized;
b) ensure that items submitted are within the ranges prescribed in the NPP Delegation Instrument; and
c) scrutinize the submitted vouchers to ascertain whether “unusual” consider giving some examples expenditures have been submitted, and query the nature of that expenditure; and
d) take appropriate accounting action.
BANKING INSTITUTION CREDIT CARD REPORTS
36. The Banking institution will provided the card holder with a monthly statement that is to be used, in concert with the Expenditure Summary, to effect payment for all expenditures.
37. Credit Card reports are available to local administrators on the financial institution’s website (www.bmodetailsonline.com).
NON-STANDARD CREDIT CARD TRANSACTIONS
38. There may be cases where local arrangements have been made for the use of a non-standard credit card. An example of a non-standard credit card is Costco since Costco does not allow the use of a MasterCard by any customer.
39. Accounting staff is to ensure that particular attention is paid to the transactions processed on non-standard cards. Expenditures on these cards must be approved by an authority other than the cardholder thus ensuring that these expenditures fall within authorized parameters, and are used only to maximize benefit to the outlet concerned.
40. The expenditures on non-standard cards must be verified and authorized by the approving authority as per the NPP Delegation Instrument in order to ensure that the expenditures are legitimate business expenses made on behalf of the outlet, and that the use of such cards provides the maximum benefit to that outlet.
NOTE
Similar to the NPP CCC, if a non-standard card provides for a purchase rebate, or some similar refund, that benefit must accrue to the outlet and not to an individual cardholder unless there is confirmed authority for this type of transaction.
41. Managers must confirm that the minor fringe benefits obtained through the use of such cards are significant enough to compensate for the increased risk.
Public Funds Aquistion Card - General
Public Funds Aquistion Card - Requesting
Public Funds Aquistion Card - Reconfirmation/Recall
Cancellation of an Aquisition Card
Government of Canada Designated Travel Card (DTC)
NPP Corporate Credit Card (NPPCCC)
NPPCCC - Emercency/Temporary CC Limit Increases
NPPCCC - Card Holder Responsibilities
NPPCCC - Reconfirmation/Recall
NPPCCC - Base Card Administrator Responsibilities
NPPCCC - Card Administrator Responsibilities (DAPO)
NPPCCC - Banking Institution CC Reports
NPPCCC - Non-Standard CC Transactions