Demonstrating Separation of Duty

Overview

To ensure adequate internal controls, purchasing responsibilities should not be controlled by one individual. It is mandatory to demonstrate separation of duty functions in the purchasing cycle. Departments must verify that each ProCurement Card transaction is reviewed by at least two people, the cardholder and a reviewer other than the cardholder.

Only one of the online "Cardholder" or "Reviewer" check boxes needs to be checked to verify review compliance. It is not necessary for both to go online to review transactions on PaymentNet, but is is an oversight recommendation ensuring appropriate budget and object code allocation.

To demonstrate separation of duty, the cardholder and the reviewer should sign off on the JP Morgan Chase “UW Transaction Detail with Notes & Accounting Codes report signifying appropriateness and reasonableness requirements for each transaction in the monthly report.

The Approval

Department purchase approval procedures must be established by the department and must retain records demonstrating those approvals. Cardholders must follow their department purchase approval procedures.

Examples of Cardholder Purchase Approval:

• Cardholder has authority to purchase because she/he has department budget authority and is knowledgeable regarding department, university and state purchasing regulations.

• Cardholder has department pre-approval to purchase up to a certain monetary limit. Beyond the limit the cardholder must seek written approval from a department head or designee.

• Cardholder has department pre-approval to purchase specific commodities or categories of commodities in addition to monetary limits. Outside of pre-approved conditions, the cardholder must seek written approval from a department head or designee.

The Reconciliation (click the "Reconciliation Best Practice" tab for complete details)

Each ProCurement Card transaction must be reviewed by at least two people, either with a PaymentNet online review or with the “UW Transaction Detail with Notes & Accounting Codes” report. (click “Reconciliation Best Practice” tab for complete details)

• Either the cardholder or reviewer must examine the cardholder’s transactions on PaymentNet ensuring proper account code allocation and checking the “Cardholder” or “Reviewer” boxes

• The purchase cycle is closed when it is determined that the amount charged was appropriate and the item was received in acceptable condition

• Do not check off the review boxes until the purchase cycle is closed.
• Do not check any of the review boxes if a dispute has been initiated with the vendor
• Do not check off these boxes if the transaction is being reviewed by JP Morgan's Fraud Department.

• Either the cardholder or a reviewer must print the “UW Transaction Detail with Notes & Accounting Codes” report

• The cardholder and reviewer must sign and date the “UW Transaction Detail with Notes & Accounting Codes” report signifying appropriateness and reasonableness of transaction

Document Filing

Proper filing of purchasing documents is critical in demonstrating the appropriateness of expenditures. Original purchase documents should be retained centrally within the department and not with the cardholder.

ProCurement Card purchasing documentation has a retention cycle of six years. This includes:

• Monthly "UW Transaction Detail with Notes & Accounting Codes" report (by cardholder and with signatures)
• Evidence of purchase approval include:
  • Email authorization
  • Department form
  • Department blanket authorization for individual cardholder
• Original invoice or receipt from vendor or:
  • Faxed invoice from vendor
  • Email invoice from vendor
  • Electronic or printed online payment screen from vendor
  • Scanned invoice or receipt
• Confirmation of receipt of goods include:
  • Signed packing slip by receiver of goods
  • Email verification by receiver of goods
  • Signed transaction log by receiver of goods
  • “Received by” signature and date on invoice by receiver of goods
  • Receipt for items purchased in-store
  • Itemized bill from restaurant with list of attendees and purpose of event
• Perjury Statement when any of the above requirements cannot be satisfied