7/06/2015
PCARD PROCUREMENT GUIDELINES
1. The following shall be effective immediately:
A. Temporary Unblocks Require a Requisition
Cardholders must create a requisition for all temporary unblock requests. After the
requisition is approved by the FA, the Department Coordinator (DC) or Alternate (DCA) shall
go to the Temporary Unblock Request link on the new PCard website
(https://sites.google.com/a/hawaii.edu/oprpm-pcard/), to fill out and submit the online
form (the requisition eDoc number is now required for temporary unblocks).
B. MCC Restriction Group & Limit Changes Require a Memo from the Approving Official
In accordance with A8.266, the Approving Official is responsible for setting the card limits
and determining the exceptions/restrictions for the Cardholder, therefore, a memo is
required from the Approving Official for changes to the above.
C. Construction, Repair & Maintenance Purchases Only Allowed on a PO or the FA’s PCard
 Definition of Construction: Process of building, altering, repairing, improving or
demolishing any UH structure, building or improvement to real property, including
painting and decorating. The term includes routine operation, repair or maintenance of
existing UH structures, buildings or real property.
 Definition of Maintenance: Commonly defined as “making or keeping a structure,
fixture or foundation in proper condition in a routine, scheduled, or anticipated fashion,
preventing its failure or decline.”
 Definition of Repair: Work required as the result of unanticipated failure.
 Cardholders who have the “Contractor” categories “unblocked” are only allowed to
purchase construction supplies with their PCards, not construction services.
D. Purchases Restricted to the FA’s PCard
A purchase order is the proper purchasing vehicle for the following items. However, if
necessary and appropriate, these items can be purchased on the Fiscal Administrator’s
PCard.
 Goods or Services with Special Requirements (e.g. required time of performance, terms
& conditions, insurance requirements, standards of performance, etc.)
 Deposits or Advance Payments
 Gift Cards
 Expenses for Non-Employees and Students
 Hotel Reservations
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E. PCard Should Not be Used to Purchase Gasoline w/o Pre-Approval
PCards should not be used to purchase gasoline unless a request for exception has been
submitted to OPRPM showing sufficient justification or extenuating circumstances. For
State vehicles, gas/diesel fuel must be acquired from Transportation Services or a gas credit
card should be obtained via SPO Price List Contract No. 13-14.
2. Although the PCard is the preferred method of purchase for small dollar goods and services, it is
NOT appropriate for all small purchases. The PCard should not be used for the following:
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After-the-Fact Purchases
Car Rentals for Non-Employees
Payment Towards a Continuation (Open) Purchase Order
Stipend payments
Real Property Leases & Rental Payments
Legal Services
High Risk Purchases
Payments to Individuals
Professional Services
Moving or Relocation Expenses
Gasoline (unless request for exception has been approved)
Services on a Contractual Basis (ref. A8.230, Payment for Services)
Honorariums
Biological Commodities, Hazardous Materials , Radioactive Materials, Ethyl Alcohol &
Narcotics (unless request for exception has been approved and on file with the Fiscal Office)
Copier Leases/Maintenance Fees
Purchases that are Ultimately Charged to RCUH Revolving or UH Foundation Accounts
3. The guidelines below are meant to clarify PCard requirements for various commodities.
A. No “After-the-Fact” Purchases with the PCard
 An after-the-fact purchase is a procurement made without authorization; the request
for approval of the purchase is made after the purchase has occurred, thus violating the
proper procedures. (ref. HAR 3-131-1)
 PCard is a purchasing card, not a payment card, so the PCard transaction must be made
at the time the goods are ordered or the services rendered. If the dollar amount of the
service cannot be determined until after the work is completed, a requisition with an
estimated amount must be prepared in advance.
 “After-the-fact” purchases are a procurement violation and must be avoided.
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B. PCard Cannot be Used for Purchases that are Ultimately Charged to RCUH Revolving or UH
Foundation Accounts.
It is not acceptable to allocate a PCard transaction to a UH account (or leave it in the default
account), then reimburse the account with RCUH revolving or UHF funds.
C. Travel Related Expenses
 Requires T-doc # or documentation showing that travel was approved
 In accordance with A8.851, travel expenses must be ordinary & necessary to accomplish
the business purpose of the trip
D. Meals & Refreshments
As provided in A8.265, section 12, paragraph b, Guidelines, meals and refreshments should
not be purchased with University controlled funds using either the PCard or PO for internal
University staff meetings, training sessions and similar activities.
E. Gift Cards
 Gift cards should be purchased with a PO; however, if the vendor does not accept a PO,
the FA’s PCard may be used to purchase gift cards.
 Departments should establish written procedures for safeguarding, custody & tracking
of the gift cards.
 Departments should establish written procedures for payments to individuals receiving
compensation for participation in research projects, surveys, or studies. Procedures
should ensure compliance with federal income tax and/or employment tax withholding
requirements and proper reporting of payments to the IRS.
 Disbursing does not capture tax reporting information from the PCDO. Therefore, when
using the PCard, the responsibility for tracking payments for IRS 1099 reporting rests
with the department. Be sure to utilize the proper object codes and obtain adequate
information to allow the University to fulfill its tax reporting responsibilities. Contact
Ken Lum (kenlum@hawaii.edu) for more information.
F. Copier Leases/Maintenance Fees
Funds for copier lease/maintenance fees must be encumbered in advance w/ a PO.
G. Insurance
All requests for the purchase of insurance shall be submitted for review & processing by the
Office of Risk Management.
4. No Personal Use of PCards
Cardholders are prohibited from using the PCard to make purchases for personal use. If a
Cardholder inadvertently makes a personal purchase using the PCard, the Cardholder should
attempt to have the transaction reversed. If the vendor is unable to reverse the charge, the
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Cardholder must self-report this transaction in writing to the FA within FIVE (5) working days. A
check shall accompany the explanation, which must be signed by the Cardholder and approved
by the Cardholder’s supervisor. Unreported personal purchases may be considered a serious
violation and the Cardholder may be subject to immediate card cancellation and disciplinary
action.
5. Using UH Buying Power is Considered Personal Use
Using the UH buying power for personal benefit is considered personal use. A good example is
the Hawaiian Air Corporate Account. In accordance with the terms of the Corporate Account
and the SPO Vendor List Contract No. 13-21, the bonus miles earned from the Corporate
Account Incentive Program must only be redeemed and used for future UH authorized
business.
6. Parceling is Prohibited
Parceling is one of the most common procurement challenges. As provided in A8.220, parceling
is a procurement violation and defined as the artificial or intentional division or fragmentation
of a purchase of same, like, or related items of goods, services, or construction into several
purchases of smaller quantities, in order to evade procurement requirements or the limits of
delegated purchasing authority. Therefore, splitting purchases (parceling) to avoid PCard limits
(e.g. single purchase limit) or the competitive threshold is prohibited. Splitting purchases
between multiple cards to circumvent the limit on individual cards is also not allowed. To avoid
multiple procurements that, when combined, exceed the card limit, repetitive purchases should
be forecasted and consolidated.
7. Procurement Violations
Procurement violations may result in civil or criminal penalties. Most procurement violations
are inadvertent and the result of administrative error. A civil penalty occurs when a person
contracts for, or purchases goods, services or construction, and knows that the procurement is
contrary to the requirements of the procurement law. Criminal penalties apply when a person
knowingly or intentionally engages in a scheme to avoid the requirements of the law. The
violation must have been committed in a deliberate manner, involving some calculated means,
such as parceling for a single procurement, a deliberate misstatement of fact, or an after-thefact purchase, which is purposely designed to avoid the requirements of the law. In addition to
any civil or criminal penalties allowed by law, the Chief Procurement Officer (CPO) may take
action against any government employee found to be in violation of any provision of the Hawaii
Public Procurement Code, HRS 103D.
8. Purchasing Ethics
Cardholders are delegated the authority to purchase non-restricted small-dollar goods and
services with their PCards and with this delegation, comes certain responsibilities. All public
employees must conduct and participate in public procurement in an ethical manner. Hawaii
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Revised Statute 103D-101(a) requires public employees to act in good faith, to practice
purchasing ethics, and to display business integrity.
In addition, Hawaii Administrative Rule 3-131-1.02 requires employees who engage in
purchasing activities to diligently follow the procurement laws, rules and procedures.
Whenever rules are silent, you must rely on common sense when conducting public
procurement. For example, there are no specific rules stating that you can’t purchase Costco or
Sam’s Club memberships with PCards, but the memberships are in the name of the cardholder
and can easily be considered a personal benefit. Amazon Prime membership may have a
legitimate business purpose, but the Cardholder could also benefit personally from such
membership. To avoid the appearance of unethical behavior, an Amazon business account for
official University use should be opened as opposed to an Amazon Prime membership, and all
shipments sent to the University.
Approvals should be required before apps, mobile hotspots, etc. are purchased to ensure that
there is a legitimate business need for these types of items or services. The apps and mobile hot
spot plans must be purchased under the department name and not the individual’s name and
departments should have internal procedures specifying that these items/services are for
official University business use only.
A government purchaser is a fiduciary for the public’s money, therefore, we must spend the
public’s money with care. Remember, everything we do in public purchasing is transparent and
the purchaser is held accountable for the conduct of the procurement.
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