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University Credit Card

Introduction

Pepperdine University offers a credit card to eligible employees for University business-related expenses. Participation in the credit card program is considered a privilege and convenience that carries responsibilities. Inappropriate use of the card may result in the loss of the privilege. The credit card is issued in the name of the employee, but is considered University property and should be used with good judgment.

The University Credit Card has a monthly dollar limit, as well as a single transaction limit for non-travel related purchases. The single transaction limit is intended to allow employees the ability to effect business purchases of goods for $5,000.00 or less.

Cardholder Responsibilities

The cardholder is accountable for all transactions charged to their credit card and may become personally liable for unauthorized or prohibited transactions. No personal charges on the credit card are allowed.

It is the cardholder's responsibility to review their transactions monthly, reallocate expenses to appropriate expense accounts and substantiate all transactions.

Substantiation

The University's policy requires cardholders to comply with the following "accountable plan" for all University credit card expenses:

  • Business Purpose - For each expense there must be a business purpose. Such expenses must be deductible business expenses, according to IRS regulations, which are incurred in connection with services performed as an employee.
  • Substantiation - Documentation is required to substantiate business related expenses under IRS regulations. The IRS requires documentation which includes dated itemized receipts to support each expense. Substantiation includes verification of:
    For travel related expenses:
    • What – the description of expense
    • When - the date of the expense
    • Where - the location of the expense
    • Why - the business purpose of the expense
    • Who - full name of individual incurring the expense and full name of other individuals in attendance

        For non-travel related expenses:

    • What – the description of expense
    • When – the date of expense
    • Why - the business purpose of the expense

In order to comply with IRS regulations, expenses must be substantiated within sixty (60) days of the statement date.

Failure to substantiate expenses within ninety (90) days will result in the suspension of credit card privileges.

Travel related expenses not substantiated within one hundred twenty (120) days of the statement date will be processed as taxable gross income and included on the cardholder's paycheck through the Payroll Office.

Cardholder's Failure to Substantiate

Failure to substantiate a monthly statement may result in the revocation of University credit card privileges.

Any substantiations that are ninety (90) days past due from date of statement will result in suspension of University credit card privileges.

University credit card privileges will be revoked for one year if a cardholder receives three ninety (90) day notices within a 12-month period. University credit card privileges will be revoked permanently if the cardholder receives one ninety (90) day notice after credit card privileges have been reinstated.

Authorized Use of the University Credit Card

The University Credit Card may be used for University business related expenses including but not limited to:

  • Air travel
  • Computers
  • Ground transportation (airport transfers, taxi, and car rentals)
  • Local business meals and entertainment
  • Lodging while traveling
  • Meals while traveling
  • Office supplies (through Office Depot)
  • Registration for business conferences
  • Subscriptions related to professional development

Unauthorized or Inappropriate Use of the University Credit Card

Unauthorized or inappropriate use of the University Credit Card may result in disciplinary action for the cardholder, which could include loss of credit card privileges, termination of employment and criminal prosecution. Furthermore, cardholders will be held personally liable for all unauthorized purchases.

The following is a sample list of such expenses and is not intended to be all inclusive:

  • Alcoholic beverages
  • Cell phone/data services
  • Donations
  • Home-based internet services

  • Hotel health club fees
  • Items or services for personal use
  • Liability insurance for rental vehicles
  • Loss or theft of personal property
  • Loss or theft of cash advances
  • Medicine and medical expenses
  • Membership fees to warehouse club stores (Costco, Sam's Club, Amazon Prime, etc.)
  • Motorcycle rentals
  • Movies or video rentals
  • Payments made to individuals
  • Payments made to out-of-state service providers
  • Personal reading materials (magazines, books, newspapers, etc.)
  • Traffic fines or penalties
  • Waves Cash Program points on employee or student ID cards

Payments to Service Providers

Due to federal and state tax regulations the use of the University Credit Card for payments to individuals, independent contractors, service providers and/or out-of-state service providers performing services within California is considered an unauthorized/inappropriate use of the University Credit Card.

Dividing of Expenses

The dividing of an expense into separate transactions on one or more credit cards to work around the single transaction limit is considered an unauthorized/inappropriate use of the University Credit Card.

Non-Substantiated or Unauthorized Expenses

Any expense lacking appropriate substantiation, documentation or authorization is considered an unauthorized/inappropriate use of the University Credit Card.

Gift Cards

The IRS considers gift cards to be income to the recipient and as such, the cardholder who purchases gift cards must document the full names of the recipients, campus-wide IDs (Social Security Numbers for non-employees), and the amounts of the cards, regardless of the dollar value.

Gift cards are reported to the IRS and included as taxable income. If the recipient is a University employee, the gift card is included as taxable income on the employee's paycheck. If the recipient is a non-employee the recipient is issued an IRS Form 1099 MISC at the end of the calendar year.

Gifts

Gifts, such as employee incentives, are considered non-taxable income by the IRS to the recipient until the collective value of all gifts to the recipient per calendar year exceeds $25.00. The cardholder who purchases a gift must document the full names of the recipients, campus-wide IDs (Social Security Numbers for non-employees), regardless of the dollar value.

If the collective value of all gifts to the recipient exceeds $25.00 per calendar year the gifts are reported to the IRS and included as taxable income. If the recipient is a University employee, the gift is included as taxable income on the employee's paycheck. If the recipient is a non-employee the recipient is issued an IRS Form 1099 MISC at the end of the calendar year.

Gifts and Celebrations

Gifts, decorations, supplies or food items for wedding showers, baby showers, birthday celebrations or other similar events are considered non-business-related purchases and are an unauthorized/inappropriate use of the University Credit Card.

Sales and Use Tax

California law regulates sales and use tax for purchases. All purchases of tangible personal property are taxable unless specifically exempted. Merchants are required to include sales and/or use tax at the time goods are purchased. The amount of tax is dependent on a variety of factors, including the state, county and city where the goods are purchased. Out-of-state merchants with a California Seller's Permit will charge use tax at the time of sale. Out-of-state merchants without a permit will not collect use tax at the time of sale, but it is still applicable.

Use tax will be accrued and charged to the cardholder's reallocated chartfield string if at the time of the sale, the merchant did not collect the use tax.

Refer to the State of California's Board of Equalization's web page for more information regarding sales and use tax.

International Travel

If a cardholder intends to travel internationally to conduct University business and expects to use their University Credit Card, it is necessary to change their Travel Status associated with the credit card with the credit card provider, US Bank.

To place a card on Travel Status the cardholder must contact a Credit Card Analyst with the dates of travel and the country of travel.

Proxy for Cardholder

If a cardholder anticipates that they will be unable to reallocate and substantiate their monthly credit card transactions a cardholder proxy should be granted authorization.

A cardholder proxy is one or more employees that are authorized to reallocate and substantiate the cardholder's monthly credit card transactions on his or her behalf.

Monthly Billing Cycles

The credit card monthly billing cycle ends on the 25th of each month, unless the 25th falls on a weekend or holiday; then, the monthly billing cycle closes on the following business day. Charges posted after the end of the monthly billing cycle will appear on the cardholders following month's statement.

Credit Limits

There are monthly dollar limits and single transaction limits templates to choose from when applying for the University Credit Card. The cardholder's position and job duties should be a factor in determining the appropriate credit limits.

Monthly Limit / Single Transaction Limit for non-travel related purchases:

$1,000 / $ 500

$2,500 / $1,000

$5,000 / $2,500

$7,500 / $2,500

$10,000 / $2,500

$10,000 / $5,000

$12,500 / $5,000

$15,000 / $5,000

$20,000 / $5,000

$25,000 / $5,000

Temporary Limit Increases

A temporary monthly or single transaction limit increase to a cardholder's credit card limits may be requested, if necessary. A temporary increase approval is dependent upon what is being purchased and who the merchant is.

A temporary limit increase must be requested in writing by email. The email should include the following:

  • Why the increase is being requested
  • What should be increased (monthly or single transaction limit, or both)
  • What your current limits are and the dollar amount of the requested increase
  • Who the merchant is
  • The date range of the increase

Temporary increases are required to have the approvals of the cardholder's supervisor, major area budget manager and the University Controller.

Permanent Limit Increases

A permanent monthly or single transaction limit increase to a cardholder's credit card limits may be requested, if necessary.

A completed and fully approved University Credit Card Application is required. The box marked "Update" should be selected and a reason for the permanent monthly or single transaction limit increase given. The increase must be in line with the available credit limits template.

Credit Card Renewal

Credit cards may be used until the last day of the expiration month. The credit card provider, US Bank, will automatically mail a new credit card directly to the cardholder's campus mail code on file prior to the card's expiration date.

Department Transfer

Cardholders that transfer departments and will continue to use their credit cards are required to submit a new University credit card application. This is necessary to revise the current credit limits, default chartfield string and to obtain the approval signatures of their new department. The box marked "Update" should be selected and a reason given. The cardholder's current credit card does not need to be canceled.

If there are proxies assigned to the cardholder, the cardholder should email a Credit Card Analyst to have the proxy's authority removed from their account.

Termination of Employment

When a cardholder's employment is terminated with the University the cardholder or their supervisor should notify a Credit Card Analyst as soon as possible for cancelation of the credit card. The cardholder or their supervisor should destroy the credit card.

Name Changes

The cardholder's legal name must appear on the University Credit Card. If a cardholder has legally changed their name the cardholder must notify a Credit Card Analyst for a new credit card. The new credit card could take up to seven days to receive. The credit card will be mailed directly to the cardholder by the provider, US Bank, to the campus mail code on file.

Extended Leaves

If a cardholder should take medical or maternity leave the credit card should not be used by another employee.

If a card requires substantiation for charges made by the named cardholder after the employee begins his or her leave, another employee may prepare the substantiation. Documentation accompanying the substantiation must include the dates of and an explanation for the cardholder's absence (e.g. "Maternity leave, 1/1/10-3/31/10").

Lost or Stolen Card

If your card is lost or stolen:

  1. Call US Bank's customer service number to report the loss:
    • Within the United States - (800) 344-5696
    • Internationally - call collect (701) 461-2010
  2. Contact a Credit Card Analyst immediately to block further use of the card.

Cardholders will receive a replacement credit card from US Bank within five business days.

Dispute a Transaction

If it is necessary to dispute a transaction:

  1. Contact the merchant first to resolve the situation.
  2. If there is not a resolution with the merchant, place the item in dispute with US Bank within 45 days from date of purchase by calling US Bank customer service at (800) 344-5696.

University Credit Card

Introduction

Cardholder Responsibilities

Substantiation

Cardholder's Failure to Substantiate

Authorized Use of the University Credit Card

Unauthorized or Inappropriate Use of the University Credit Card

Payments to Service Providers

Dividing of Expenses

Gift Cards

Gifts

Gifts and Celebrations

Sales and Use Tax

International Travel

Proxy for Cardholder

Monthly Billing Cycles

Credit Limits

Temporary Limit Increases

Permanent Limit Increases

Credit Card Renewal

Department Transfer

Termination of Employment

Name Changes

Extended Leaves

Lost or Stolen Card

Dispute a Transaction

                                                                                                                                                Last Updated: 06/01/2017