NNPCL SCM_Purchasing Cards.pdf

NNPC Limited SCM Processes and Procedures 11.0 Administer Purchasing Cards (P-Cards) This process is designed to provide an efficient process for making routine smaller purchases thereby streamlining the purchase cycle for recurrent purchases. It recognizes the strategic role by Delegation of Finan...

NNPC Limited SCM Processes and Procedures 11.0 Administer Purchasing Cards (P-Cards) This process is designed to provide an efficient process for making routine smaller purchases thereby streamlining the purchase cycle for recurrent purchases. It recognizes the strategic role by Delegation of Financial Authority holders and the Supply Chain Team in initiating and processing small, unplanned and time critical expenditures, not covered by framework agreements. Objectives The objective of Administer P-Cards process is to ensure: • • Timely responsiveness to unplanned and time-critical procurement requests not covered by a framework agreement. Significantly reduces the need for imprests for key transactions. 11.1 1. Administer Purchasing Cards (P-Cards) Policies Establishment of P-Card Purchasing Cards (P-Cards) are operational debit cards that will be used in place of imprests to procure unplanned and time-critical expenditure, not covered by framework agreements. P-Cards shall be applicable for unplanned business expenditure that requires immediate purchase. It shall be used for transactions that may not be feasible to process through subsisting procurement arrangements. 2. P-Card Eligibility Naira P-cards shall be assigned to all Delegation of Financial Authority holders and the Supply Chain Team to cover for urgent needs across the business. Other departments/divisions may request for P-Cards based on the frequency of time-critical, small spend. Each request shall be reviewed and approved by the relevant function leads and Supply Chain Team. 3. P-Card for Foreign Subscription Dollar P-Cards shall be issued to functions that require frequent subscriptions (denominated in foreign currency). Some of the eligible transactions include: a. Subscriptions such as LinkedIn (HR Recruitment), system licenses (IT). b. Online foreign training courses for eligible staff ((HR Learning). 95 NNPC Limited SCM Processes and Procedures 11.1 4. Administer Purchasing Cards (P-Cards) Policies c. Foreign services for which only card payments are accepted. Custody of P-Cards For P-Cards not held by DFA holders, a designated staff in the Department (e.g., Supply Chain or HR) shall maintain custody and ensure use is approved on a case-by-case basis. The card shall not be released for any transaction to members of staff unless due approval has been obtained. The custodian of the card shall ensure that no cash is withdrawn unless an approved need arises. The P-Card Custodian shall always safeguard and account for the funds during its operation. In instances where the fund's custodian will be away, The Head of Department shall appoint a deputizing custodian for the PCard management duties. 5. Eligible Use of P-Cards P-Cards shall not be utilized for the following: a. b. c. d. e. f. Loans to staff. Personal commitments. Travel allowances. Reimbursement of travel expenses. Goods or services covered by framework agreements Payment on invoices over N50,000 on the same expense heading. Approval to spend funds from the P-card shall be by the Head of Department. In the absence of the Head of Department, his designate shall authorize any spending from the card. All approvals shall be made via email. 6. P-Card Expense Retirement Transactions paid for with the P-card shall be supported by a receipt unless it is impracticable to obtain a receipt for the payment. The Custodian shall maintain a detailed record of all users of the P-card and the purpose for which the card was used. 96 NNPC Limited SCM Processes and Procedures 11.1 7. Administer Purchasing Cards (P-Cards) Policies P-Card Replenishment The P-card shall be funded by the relevant Finance Team to a maximum of N300,000 in the first instance, and on replenishment when the holding value is below 25% of assigned value. The limits shall be adjusted subsequently based on changing business needs and the role of the P-Card Holder. For non-Naira P-Cards, a justification of the limit shall be made at each request and approved by the relevant DFA holders. Replenishment request shall only be made when previous P-Card expenditure has been properly accounted for by the User Department & Finance. 8. P-Card Audit & Review P-Card transactions may be subject to periodic audit by GRC/Internal Control function without notice to the P-Card Custodian. On completion of each audit, a report shall be prepared by the internal auditor and a copy shall be submitted to the Respective HODs and Supply Chain Management. Spend Analysis of P-cards usage shall be prepared by SCM (Strategic Sourcing Unit) for insights and possible interventions in future procurement strategies for frequently occurring P-Card transactions. 11.2 S/N 1. Administer Purchasing Cards (P-Cards) Procedures Responsible Party Description User Department (N-6) On identification of need for P-Card Job Aid Prepare justification for P-Card and forward to N-3/4 of proposing User Department. Note: P-Cards shall be applicable for unplanned business expenditure that requires immediate purchase. It shall be used for transactions that may not be feasible to process through subsisting procurement arrangements. 97 NNPC Limited SCM Processes and Procedures 11.2 Administer Purchasing Cards (P-Cards) Procedures Responsible Party Description Job Aid 2. User Department (N-4) Review and endorse request and forward to SCM for approval. Email 3. SCM (N-5) Review justification for P-Card, ensure basis is not covered by existing framework agreement and forward for SCM approval Email 4. SCM (N-3/4) Approve P-Card request and forward to Finance for processing and issuance S/N If justification for issuing P-Card is insufficient, approver rejects request and recommends alternative. 5. Finance Obtain internal Finance approval and liaise with Bank to issue P-Card to approved User Department 6. User Department (N-3/4) Designate a P-Card Custodian for the department and approve all P-Card purchases. 7. User Department Obtain approval from (N-3/4) before making a purchase and submit accompanying receipts to designated P-Card Custodian after each purchase. Email 8. P-Card Custodian File receipts and keep record and approval trail of all P-card transactions. ERP 9. P-Card Custodian On a monthly basis, collate all receipts and support documents for all payments made in the month and prepare a reconciliation report against the funds disbursed into the P-Card. 10. P-Card Custodian At the end of the month, prepare a replenishment request and forward together with the reconciliation report to N-3/4 for review and vetting. MS Excel Email 98 NNPC Limited SCM Processes and Procedures 11.2 Administer Purchasing Cards (P-Cards) Procedures Responsible Party Description Job Aid 11. User Department (N-3/4) Review and approve replenishment request if justified. ERP 12. P-Card Custodian Forward approved request and reconciliation report (including receipts and other support documents) to Finance and Internal Audit 13. Finance Review report against account statement. S/N If there is a discrepancy, notify user department custodian for explanation. 14. Finance If no discrepancy, replenish P-Card as required. 15. SCM Conduct quarterly review of P-card expenditure to inform policy and consider if certain procurements can be planned going forward. Make recommendations to management as required. 11.3 S/N Administer Purchasing Cards (P-Cards) Input & Output Documents Document Description Type Frequency Source Recipient 1. 1 Approved P-Card Request Input As required SCM (N-3/4) Finance Department 2. 2Approved P-Card Replenishment Request Input As required User Department (N-3/4) Finance Department 3. 3Reconciliation Report Input As required P-Card Custodian N-3/4 99 NNPC Limited SCM Processes and Procedures 11.3 S/N Administer Purchasing Cards (P-Cards) Input & Output Documents Document Description 4. 4Receipts Support Documents 5. 5Spend Report 11.4 S/N and Analysis Type Frequency Source Recipient Input As required P-Card Custodian N-3/4 Output Quarterly Officer Market Survey Head Strategic Sourcing Unit Administer Purchasing Cards (P-Cards) Key Performance Indicators Performance Measure Basis of Measurement Timeframe Target 1. 1 Timeliness of purchase reconciliations Latest date for completion of the request process. Monthly 6th day of the month 2. 2Appropriateness of Pcard purchases Number unauthorized inappropriate purchases. As required Zero unauthoriz ed purchase 3. 3Timeliness of Spend Analysis Report Latest date of completion of spend analysis from date of receipt of spend data Quarterly 2nd Week in the month after the quarter of or P-card 100 NNPC Limited SCM Processes and Procedures 101