The Purchasing Process

Prior to making any purchase, your department should follow its existing pre-purchase process. If your department requires completing an internal requisition form, obtaining approval signatures that may vary according to the commodity and dollar value of the purchase, assignment of cost centers, cost types or project codes, it should continue to do so.

FlexCard purchases require a few extra steps to determine whether they are allowable:

1. Does the total (tax included) exceed the card's per transaction limit?
2. Is the commodity restricted - for example, a narcotic, precious metal, explosive material or gas, firearm, personal or professional services requiring a contract?

If the answer to either question is yes, a high value purchase order or contract must be obtained before FlexCard can be used for payment.

However the order is placed, it must be documented in order to meet records retention and auditing requirements.

1. Internet Orders: print a copy of the order confirmation page (not just the shopping cart), confirming email or similar document
2. Telephone Orders: note the fact that the order was phoned in, either on a department requisition form, or on the packing slip or paid invoice, when the order is received
3. Fax Orders: retain a copy of the fax (being careful to black out any card number, security code and expiration date information)
4. In-Person Purchases: retain the itemized cash register receipt; if you are only provided with a credit card receipt, attach it to a piece of paper when you return to your department and have someone else write down the list of items that were purchased

After the order has been placed, retain the documentation, to match up with the receipt documents when the order is completed and to complete the documentation package for the order.

The Allocation Module sends email notifications of new transactions to the Cardholder, and all Reviewers/Allocators in his/her department, each day that one is received from the bank (multiple transactions are bundled in one email). Except in the case of in-person purchases, the department will almost always receive the email notification before delivery of the order.

Cardholder
Should log onto the Allocation Module (the link is provided in the email) and verify that he/she has made the purchase. If the merchant name or transaction are unknown, it is almost certainly fraud and the Cardholder should contact U.S. Bank immediately (view Fraud and Disputes).

Reviewer
Unless the transaction was an in-person purchase, the Reviewer does not have to do anything at this time, unless he/she suspects fraud, in which case the Cardholder should be contacted immediately.

In order to maintain proper separation of duties and controls, when possible, an employee OTHER THAN THE CARDHOLDER should be responsible for receiving the order.

1. Review the shipment for completeness: Were all items shipped or are some on back order? Do the items received match the items ordered?
2. If there are problems – for example, if the wrong item was shipped – contact the Merchant and take the necessary steps (return of incorrect item, processing of credit invoice, re-shipment of correct item) to remedy the situation. There is no need to file a Dispute with U.S. Bank unless you cannot resolve the problem with the Merchant.
3. Check off each item on the packing slip/or paid invoice enclosed with the order.
4. Sign and date the packing slip/paid invoice and attach it to the order documentation package. NOT SIGNING AND DATING THE RECEIPT DOCUMENT IS THE NUMBER ONE AUDIT FINDING.
5. If no packing slip or paid invoice was enclosed with the order, note this fact on the order document. In this way, it will be clear that the receipt document was not lost or discarded.
6. Pass the documentation package to the appropriate Allocator or Reviewer.

Full documentation of the allocation and approval process is provided under the INFO FOR REVIEWERS/ALLOCATORS section of these webpages, and under the RESOURCES - ALLOCATION MODULE tab. A few important general reminders are provided below.

1. Your department has 14 days from the day that the notification of a new transaction was emailed to REVIEW it (that is, to allocate it to a specific LAFSO and to approve it). If unreviewed at 14 days, it will automatically be charged to the FlexCard’s default LAFSO, which may not be appropriate, thus requiring the preparation of a TOE.
2. The Allocation Module will generate reminder email notifications as a transaction nears 12 days in unreviewed status.
3. If the 14-day window is approaching (technically it occurs at 1 PM each weekday) and your department has not yet received the order, the transaction should still be allocated to the appropriate LAFSO and reviewed, in order to avoid any unnecessary TOEs or financial journals to adjust use tax.
4. Reminders of unreviewed transactions are issued at 30, 45 and 60 days; in the last case, FlexCard Administration is notified and will contact your department.
5. It is critical that all transactions be reviewed within 60 days, because after that point your department loses the right to dispute even fraudulent charges with the bank.

FlexCard purchases are no different from other expenditures that post to the General Ledger: all financial transactions should be reconciled each month.

In the case of FlexCard purchases, the initial reconciliation is made at the time that the charge was approved and allocated by the Reviewer. The General Ledger review consists of verifying that the charge has hit the General Ledger in the expected amount, under the expected LAFSO. Any errors must be corrected via processing of a TOE or financial journal.