How complete is your internal agreement that cardholders and their managers sign? Below are eight sample statements, from my P-Card policies and procedures guide, that could be included within a single agreement that covers both roles—cardholder and manager (reviewer/approver).
While most organizations already utilize such an agreement, I recently met end-users who were looking to improve what they implemented when the card program was first launched. Could yours be refortified to improve P-Card program controls? Ensure your legal team and/or human resources department has reviewed and approved it in advance.
The Introduction
Explain the purpose; for example:
Your participation in the P-Card program includes many responsibilities to help ensure the security, health and success of the program. Your signature below represents that you understand your role, and the related policies and procedures, and agree to comply with them.
The Body
Within the agreement, include content about:
- who owns the card
- who can use it
- prohibited purchases
- requirements for program participants
- ongoing responsibilities
- why the card could be canceled
- when it must be surrendered
- consequences for misuse/abuse
An internal agreement is a common P-Card preventative control.
Definition
An internal agreement is a document that specifies the Purchasing Card-related role(s), associated responsibilities and consequences for non-compliance. The employee signs the agreement prior to card issuance to represent that he or she understands the role and agrees to comply with the requirements.
Eight Sample Statements
- Even though a card is issued in an employee’s name, it is the property of [Company].
- [Company] prohibits personal purchases on P-Cards.
- The cardholder is the only person authorized to use the card for business-related purposes.
- You must successfully complete P-Card and any related training prior to card issuance and on an ongoing basis, as described within the P-Card policies and procedures.
- You are part of an important line of defense against card fraud. To protect [Company] and its assets, you must follow [Company’s] Information Security Policy and: a) ensure the card is kept secure, along with related account information; b) complete the transaction reconciliation and review process outlined for your role within the P‑Card policies and procedures; c) immediately report a lost, stolen or compromised card.
- A cardholder must cease using the P-Card and surrender it upon employment termination or as requested by management.
- The program manager, after notifying you, may cancel the P-Card due to insufficient usage.
- Violation of company and/or P-Card policies and procedures may result in disciplinary action, including termination. [Company] may also seek legal action in the event of card fraud involving any [Company] employee.
Need additional help with revitalizing your P-Card policies and procedures? Purchase the related guide.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…