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Quarterly Purchasing Card Administrators’ Meeting Wednesday, August 24, 2011 – 9:00-Noon Winewood Office Center, Building 4

AGENDA Introductions Special Presentations

VISA/Bank of America – Card Issues

o Forced Transactions

o Service Charges Questions from Administrators

Marie Walker, Department of Financial Services—General PCard Program Overview

Bob Notman, Department of Revenue—Red Flags: Combating Purchasing Card Fraud

Michelle Oliver, Department of Financial Services—Using Level Three Data

Outstanding Items

ITN Update

National Association of Purchasing Card Professionals (NAPCP) Membership Update

MRE Training

Vendor File Reminders

Agency Plan Reviews

Rep Letters

New Items

Administrator Backup

Status of FLAIR Requests

Card distribution to field employees—discussion

FDLE Best Practice—Separated Employees

Questions/Other Discussion

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Quarterly Purchasing Card Administrators’ Meeting Minutes Wednesday, August 24, 2011 – 9:00-Noon Winewood Office Center, Building 4 Facilitator: Marie Walker

Introductions

Christina Smith, Department of Financial Services

As Director of the Division of Accounting and Auditing, Ms. Smith welcomed the meeting participants.

Special Presentations

VISA/Bank of America – Darren Muise, Visa; Evan Tullos, BOA; Kristen Harrison, BOA (Presentation is attached to e-mail and will be posted on the PCard website.)

o Forced Transactions – available for emergency situations and when network is down, although merchants force transactions through in non-emergency situations. Merchants are allowed to re-use an existing authorization number to process recurring charges. Merchants assume all liability for forced transactions. They cannot dispute those transactions. Administrators can file a complaint regarding forced transactions. Complaints must be filed with Bank of America, who will forward form to Visa. Visa can fine Acquirer (merchant’s bank) and merchant and/or revoke merchant’s privileges to accept Visa. Visa cannot provide the outcome of the complaint to State of Florida, due to privacy rights.

o Service Charges/Convenience Fees – violation of Visa rules unless accepting card is a true convenience. Visa allows convenience fees if:

the fee is a flat charge, not exceeding $3.95,

the fee is not a percentage,

no other payment method is available,

cardholder is aware of fee upfront,

the merchant is a utility company. Utility companies must also comply with the flat fee and cardholder awareness requirements.

Mastercard and AmericanExpress allow convenience fees. Store clerks may not be aware of Visa’s rule and charge the fee for Visa transactions. DFS does not have legal authority to pay convenience fees.

o Visa Waiver of Liability – Visa protects agencies up to $100,000 against cardholder abuse in certain circumstances.

o Industry Trends – The industry (not Florida’s) average rate a merchant pays to process a credit card is 3% – 3½%. Study shows that on average warrants cost $72 to process, while PCard transactions cost $22. Also, on average, checks/warrants take 33 days to process for payment, while PCard transactions process in 72 hours. Current fraud trends include organizations with machines that generate account numbers and

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test the numbers through the black market. If the account number works, plastic is created. Another current fraud trend is mail theft in mail rooms.

Marie Walker, Department of Financial Services—General PCard Program Overview

o It has been a year since Marie became Statewide PCard Administrator. The following are some of the items the Statewide Office is currently working on:

The Statewide PCard Administrator Office is working on updating the Administrator’s Manual. First draft will remove information that is included in other resources (such as Reference Guide for State Expenditures) and add information that is not included in policy documents. The first draft will also include a revised Model Plan. The next version will include FLAIR’s Administrator Manual, to have everything in one document.

The Statewide Office is also working with FLAIR Education to post Approver and Administrator training on the web.

Bob Notman, Department of Revenue—Red Flags: Combating Purchasing Card Fraud (Presentation is attached to e-mail and will be posted on the PCard website.)

Michelle Oliver, Department of Financial Services—Using Level Three Data (Presentation is attached to e-mail and will be posted on the PCard website.)

Outstanding Items

ITN Update – No new information has been released regarding the ITN.

National Association of Purchasing Card Professionals (NAPCP) Membership Update – Marie has submitted a request to management for the Statewide Office to join the association as the prime member ($495 membership fee) and the agencies join as associates ($149 or less membership fee). Marie will inform Administrators when a decision is made.

MRE Training – FLAIR Education plans to schedule training for the end of September and asked if Administrators would prefer it to be held on a Monday or Friday. By a show of hands, the Administrators preferred training to be held on Friday. FLAIR Education will send a letter to the Administrators once the training is scheduled.

Vendor File Reminders – The Statewide Office receives e-mails and phone calls from Administrators regarding the Statewide Vendor File requirements. Debra Evans with the Bureau of Accounting, Statewide Vendor Group, spoke on this topic at the February 2, 2011, quarterly Administrators’ meeting. The Administrators should either refer to the minutes of that meeting or contact the Statewide Vendor Group directly.

Agency Plan Reviews – The Statewide Office is almost done with the initial reviews of the agency plans submitted with last year’s Rep Letters and is also working on revisions.

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Rep Letters – The Statewide office plans to have a workshop regarding the upcoming Rep Letters in the fall. The Rep Letters will be sent out to the agencies in the fall.

New Items

Administrator Backup – It is important that each agency have a backup administrator who can take over in the event the Administrator is not there. It is a severe inconvenience for an agency to not have someone who can speak to the bank, order cards, cancel cards, etc.

Status of FLAIR Requests:

o Population of Social Security Number (SSN) in PCard Module – FLAIR staff is looking at the ―envelope‖ process. They discovered that some of the fields in the envelope were not addressed in programming. Adding the fields to the programs should increase the occurrences of sub-vendors being populated. This change is being tested and should be in production soon.

o CDPURGE Change – After old records were purged from the Information Warehouse, we discovered 49 old records that have been in FLAIR Departmental for years. Those records should be deleted when FLAIR conducts the next purge, December 30th.

o Purge of PCard approver records with no active PE records – For approver records deleted before 2002, there are some discrepancies in the PCAPRV and PCPERSON tables. The approvers appear to be active in one table, but not in another. FLAIR staff is currently working to resolve the issue.

o PCard website enhancements – The Statewide Office has made some progress in updating the website with additional reports, but the website is a work in progress. Since the Agency Administrator List has not been added to the Administrator Only Page, the Statewide Office plans to include the list with the Weekly PCard Update that is sent to the Administrators every Wednesday. NOTE: Since the meeting, this information has been posted to the Administrator-only page of the PCard website.

Discussion/Best Practices – Who has processes that are working well

for their agency and would like to share with the group?

Card distribution to field employees :

o DOR sends an e-mail to the cardholder that his/her PCard is on the way via FedEx and requests the cardholder to let the Administrator know if the card has not been received within 10 business days. The card is

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cancelled if the Administrator does not receive a response from the cardholder.

o DOH sends an e-mail to the cardholder and office liaison. If the cardholder does not respond within 10 days, the card is cancelled.

o DEP sends a form with the card that must be signed by the cardholder and returned to the Administrator.

o FWC lowers the credit limit of the new cards to $1 and sends the cards to the Regional Business Managers and has the cardholder sign an acknowledgment form. Once the signed form is faxed to the Administrator, the credit limit is raised to the appropriate level.

o DBPR sends a memo with the P-Card requesting the cardholder to e-mail the Administrator once the card is received. In addition, the Administrator e-mails a notification message to the cardholder that the PCard is being delivered by UPS with the date/time to expect the card, and a request to the cardholder to e-mail the receipt of the card. Both actions are done to ensure that the Cardholder notifies the Administrator promptly, so action can be taken to cancel the card if it has not been delivered.

Notification of separated employees:

o FDLE PCard Administrator receives a monthly separation report, generated by Human Resources, to ensure cards have been cancelled.

o DJJ has a separation notification system, where the supervisor enters the information into the system and an email is generated to the PCard Administrator. The Administrator can then ensure the card has been cancelled.

o DBPR receives a separation report bi-weekly and each division’s Human Resource person contacts the Administrator when an employee leaves. Also, DBPR P-Card Approvers contact the Administrator when an employee leaves. Cardholders also receive training to notify Administrator before separation.

o DOR receives a network access cancellation notice when an employee leaves.

o DOH uses a program that compares active cardholders with payroll data. An e-mail is sent to the office liaison for cardholders with no active payroll data. If the employee left the agency, a cardholder form is submitted to close the account. Cards of employees on extended leave are also cancelled.

o DEP’s IT staff created a program that compares PeopleFirst data with cardholder information for verification of employment. This program is run by the Administrator every morning.

o FWC requires supervisors to shred cards when notified employee is leaving, not wait until termination date. The Administrator also receives a list from personnel as a back-up.

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Hurricanes and Other Emergencies –The Statewide Office is monitoring the current situation (Hurricane Irene). As of the day of the meeting, the Governor’s Office had not issued an Executive Order declaring an emergency — which triggers the PCard emergency process. The procedure and Real Time Form is on the Administrator-only page of the PCard website.

Level 3 Line Item Detail

What is Level 3 Line Item Detail?

Level 3 data is similar to a point-of-sale receipt. The detail provided includes: unit cost,

quantities,

total item cost,

product codes,

product descriptions,

other transaction data.

Vendors Providing Level 3 Data

Most Popular:

Amazon/Amazon Marketplace

Office Depot

Staples

Best Buy

Publix

Hardware Suppliers:

Lowes

Home Depot

Auto Parts:

Advance Auto Parts

AutoZone

Industrial Suppliers:

WW Grainger

Bob Barker Company

Fisher Science

Henry Schein

PCLNITEM IW table

FIELD DESCRIPTION BUSN_NM (A44) Business line 1 name.

CHRG_ID (A23) Uniquely identifies a particular charge.

COMMODITY_CD (A4)

A code identifying the category of a particular commodity item. (Ex: 0425 – Office Furniture; 0620 – Erasers, inks, leads, pens, pencils, etc.)

DISCOUNT_AMT (D13.2) Discount amount – The amount of the discount to be applied if paid within the discount time period.

INVOICE_LINE_NBR (A3)

Invoice Line Number - The identifying information assigned to identify the line on an invoice. This could be alpha or numeric character.

INVOICE_NBR (A7) An identifier assigned by the transaction vendor or the submitting agency to identify the invoice.

ITEM_CD (A12) A code assigned by the vendor that identifies a specific product item. (Ex: SWI38101 Staple Remover)

ITEM_DESC (A26) A description of the commodity item(s) that was charged to a State Purchasing Card.

ITEM_QTY (D13.4) The quantity of a particular commodity item that was charged to a State Purchasing Card.

IW_DT (YYYY-MM-DD) The date that the row was added to the Information Warehouse.

OLO (A6) Organization level at which an agency maintains independent fiscal records.

SALES_TAX_AMT (D13.2) Sales tax amount for the charge.

SALES_TAX_RATE (A4) The percentage of sales tax due for a particular item(s).

TOTAL_ITEM_AMT (D13.2) The total dollar amount of a particular commodity item(s) charged to a State Purchasing Card.

TRN_SEQ_NBR (A13) A sequence number assigned to identify a Purchasing Card transaction.

UNIT_ITEM_AMT (D13.4) The dollar amount of a particular commodity item (the amount per item).

UNITS_OF_MEASURE (A12)

Refers to the measurement focus of life for a property item. Values are: 1 = Months 2 = Hours 3 = Miles 4 = Other

Query Results

group person ID cardholder invoice # vendor chg date chg amt

total item

amt

unit

item amt

item

qty item cd item description

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $7.79 $7.79 1. 29033400000 ITALIAN WHL SUB CB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $7.79 $7.79 1. 29032700000 SPR CBN WHL SUB CM

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.49 $6.49 1. 29016200000 EGG SLD 1/2SUB CMB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.99 $6.99 1. 29033200000 VEGGIE WHL SUB CMB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $7.89 $7.89 1. 29073600000 BH PHILLY HF COMBO

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.49 $6.49 1. 29016500000 HAM SLD 1/2SUB CMB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $25.96 $6.49 4. 29017000000 ULTM 1/2 SUB COMBO

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.49 $6.49 1. 29017200000 TUNA 1/2 SUB COMBO

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.99 $6.99 1. 21360000000 BH SPEC ORD 1/2 CB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $7.39 $7.39 1. 29050400000 CHIX TNDR 1/2 CMBO

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $25.96 $6.49 4. 29017500000 TRKY 1/2 SUB COMBO

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $7.79 $7.79 1. 29032100000 ULTIMTE WHL SUB CB

GROUP A 10010010 JANE DOE 2221369 PUBLIX #782 11/15/2010 $130.51 $6.49 $6.49 1. 29017400000 RST BF 1/2 SUB CMB

Query Results

group person ID cardholder invoice # vendor chg date chg amt

total item

amt

unit item

amt

item

qty item cd item description

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $0.91 $0.91 1. 199856 IDEAL CLAMPS,#2,SMALL,BX

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $14.04 $4.68 3. 160064 FLAGS,POST-IT(R),SMALL S

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $15.44 $7.72 2. 315515 FOLDER,LTR,1/3CUT,100BX,

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $16.72 $8.36 2. 790761 PEN,RETRACT,G-2,BK,FN

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $16.72 $8.36 2. 790801 PEN,RETRACT,G-2,FN,BLUE

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $25.80 $2.15 12. 729525 BINDER,VUE,3RG,11X8.5,1"

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $26.70 $4.45 6. 729640 BINDER,VUE,3RG,11X8.5,3"

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $65.72 $32.86 2. 108729 INK,HP 94,TWIN PACK,2PK,

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $81.88 $40.94 2. 438950 INK,HP 95,2/PK,COLOR

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $13.52 $6.76 2. 504808 NOTE,PST-IT,SSTCKY,4X6,5

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $11.99 $11.99 1. 564070 TYLENOL,EXTRA-STRENGTH,5

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $9.40 $4.70 2. 420994 NOTE,OD,3" X 3",18/PK,YE

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $2.70 $2.70 1. 825182 CLIP,BINDER,SM,3/4IN,144

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $4.12 $1.03 4. 369275 OD,DIV,INSERT,5TAB,CLR,6

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $5.22 $5.22 1. 203349 MARKER,SHARPIE,FINE,DZ,B

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $5.28 $5.28 1. 345686 PAPER,COPY,8.5X11,GRD,5M

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $5.28 $5.28 1. 478156 PAPER,COPY,500-CT,8.5X11

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $5.34 $5.34 1. 825190 CLIP,BINDER,MED,1.25IN,1

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $5.78 $5.78 1. 848564 CALC INKROLL PR-42 2-PAC

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $8.36 $8.36 1. 790781 PEN,ROLLER,GELINK,G-2,X-

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $9.40 $9.40 1. 753313 LABEL,SHIPPING,RL,2.5X4

GROUP B 20020020 JOHN DOE 0150947 OFFICE DEPOT #1165 11/12/2010 $962.69 $206.64 $206.64 1. 975384 CARTRIDGE,LASER,HP Q5942

Level 3 Line Item Detail

Questions?

If you have questions or need the notes version of this presentation,

please call Michelle Oliver at 850.413.5451.

Red Flags

Combating Purchasing Card Fraud

Robert NotmanAgency Purchasing Card AdministratorFL Department of Revenue

Overview

What are PCard Red Flags?

Mitigating Risks

What else could we do?

What are PCard Red Flags?

Missing receipts

Receipts that are not itemized

Receipt date or total does not match FLAIR

Cardholder frequently claiming erroneous charges by vendors

Cardholder frequently claiming pending credits

Split transactions

Transactions at or near the max limit

Failure to complete monthly reconciliation

Transactions identified as “unusual” or with “unusual” vendors

Mitigating Risks

Risk Analysis

Internal Controls

Adaptation of card use with controls

Training

Annual Reviews

Post Reconciliation Audits

Provide Feedback, include the supervisor

Comparing Card List to Employee Lists

Risk Analysis

Evaluate how the card is being used

What are the risks associate with its use?

What controls are in place?

Internal Controls

Cardholder

– Limits

Supervisor or Approver

– Active participant

Payer

Reconciler

Agency Purchasing Card Program Administrator

Adaptation of Card Use with Controls

Merchant Category Codes

Use of Restricted Codes

Use of non-Restricted Codes but…

Training

Before the card is issued

Ongoing “Purchasing Card Messages”

Remedial in response to audit findings

Annual Review of Responsibilities

Annual Reviews

Have the supervisor review summary of cardholder activity and credit limits

Have cardholders and approvers/reconcilers acknowledge their responsibilities with the card

Post Reconciliation Audits

Max dollar transactions

100% audit of new cardholders

Transactions with prohibited or high risk vendors (PayPal)

Transactions with prohibited or restricted commodities (fuel, fans)

High number of transactions

Provide Feedback

Document audit findings

Use a template

Review findings to identify weaknesses

Include supervisors in the feedback loop

Employee List/Cardholder List?

Does someone at your agency compare the Cardholder list to the employee list?

This protects the Agency Administrator as well as the agency.

What Else Could We Do?

MRE – Line Item Data?

Positive Feedback

Look at outside audit reports

Old tried and true

Red Flags

Look out for the Red Flags

– Could be nothing, or it

– Could be something serious

Develop tools that suit your situation

Questions?