Controls for Procurement Cards (#4)

In this episode, we discuss the controls associated with procurement cards (also known as credit cards). These cards are a great way to minimize the use of purchase orders, so it is useful to not impose too many controls on them; a reduced volume of controls will tend to encourage their use. Nonetheless, some controls are required, including the following:

  • Enter all card purchases into a transaction log

  • Reconcile the monthly card statement to the transaction log

  • Use a missing receipt form to document purchases for which no receipts exist

  • Use a line item rejection form to specify which card purchases are being rejected

  • Use a standard card reconciliation checklist

  • Use a procurement card orientation meeting to inform users about policies and procedures

  • Restrict card usage based on dollars per day or by card

  • Only the program manager is allowed to increase each card’s spending limit

  • Prohibit cash advances on procurement cards

  • Require a card user agreement that states the responsibilities of each card user

  • Track card spending on a trend line to search for anomalies

  • Highlight any cost of goods sold card purchases

  • Conduct a background check on anyone requesting a card

  • Assign a separate person to receive new cards, other than the program manager

  • Impose various policies that put boundaries around card usage

Related Courses

Accounting Controls Guidebook
Accounting Information Systems
Purchasing Guidebook