12 program support responsibilities.

The trifecta of Commercial Card program management is the program manager/administrator (PM/PA), procurement, and accounts payable (AP). However, the latter two might get overlooked when program roles are developed. Does your organization assign specific card-related responsibilities to procurement and AP? They can fulfill an important support function, regardless of which department the PM/PA resides in. Even though department roles vary from one organization to the next, you still can ensure the following 12 tasks are assigned to an appropriate party. Your card program will benefit from everyone working together.


Program success is dependent on supplier acceptance of Commercial Cards. Procurement (or a related department) should:

  • Address card acceptance in competitive bids/RFPs 
  • Specify card-related terms in supplier contracts; for example, prohibit surcharges for card acceptance and mandate compliance with the Payment Card Industry Data Security Standard (PCI DSS)
  • Notify AP about card-accepting suppliers


AP is in a gatekeeper position to uphold policies and/or contracts concerning payment method. They should:

  • Remove card-accepting suppliers from the master vendor file (unless there is a good reason, along with accompanying controls, to pay a particular supplier more than one way)
  • Not set up new suppliers in the master vendor file until they verify the intended payment method
  • Refuse to process check requests for suppliers that accept cards
  • Reduce the frequency of check runs to encourage supplier acceptance of electronic payments

Both Departments

Tasks for both procurement and AP include the following.

  • Contribute to the establishment of, or updates to, an internal “payments policy”
  • Train their staff on their card-related roles and responsibilities
  • Monitor suppliers/payments to ensure card payments occur as expected
  • Look for additional opportunities to use cards—plastic or virtual—based on payment history
  • Track the impact of card payments (e.g., process savings, PO reduction, etc.), which helps fuel program metrics

How many of the 12 things noted herein does your organization consistently do? How can you strengthen program support roles? See also a related blog post on how management needs to address two aspects of the staff members (like procurement and AP) responsible for executing the organization’s payment plan.

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

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Procurement fraud and card misuse reenter the news.

Two different situations, but both yielded negative press. The following stories once again highlight control gaps that allowed fraud and misuse to occur. While we cannot control the media, we can learn from the mistakes of others. To keep your organization out of the “bad news” arena, take necessary actions now to improve internal controls. 

If your card program (or your client's card program) has been the subject of a good media report, I encourage you to share it within the comments section below. 

Avoid being the topic of bad news by utilizing effective internal controls.

Avoid being the topic of bad news by utilizing effective internal controls.

1. Procurement Fraud 

The Financial Industry Regulatory Authority (FINRA) permanently barred a former Charles Schwab financial representative after he purchased and resold approximately $1 million of office equipment.

FINRA records note that, between February and August 2014, the rep used the firm’s corporate procurement system to purchase office equipment for his branch office in Florida, which he later sold to various people to obtain cash for himself. Multiple organizations reported this story last November, including ThinkAdvisor.

Control Gaps

I doubt that it was typical for a rep with his size of office to spend nearly $1M on office equipment in less than a year using corporate funds. Such activity could not even be explained away as a new rep establishing an office (it would be quite an office!), as he was a 15-year veteran. I assume that the control gaps included:

  • Overly trusting management who did not consider or believe that a veteran employee would commit fraud 
  • No budget for the rep to adhere to 
  • No purchase limit/threshold preventing the rep from spending above “X” amount via the procurement system each month 
  • No one monitored his purchases or visited the branch office for purchase follow up 
  • Lack of fixed assets tracking 
  • No one reviewed spend reports to compare the rep’s monthly spend total to previous year(s) or to other similar sized reps in an effort to identify out-of-norm spending activity

2. Card Misuse/Abuse

Right in my own backyard, the local newspaper, Star Tribune, reported last month on card misuse and abuse within the Minneapolis Public Schools (MPS). The issues included inappropriate purchases, lack of receipts (even though receipts are required) and out-of-policy purchases; for example, using the card at local restaurants when the policy only allowed meal purchases while on business travel. Top executives have been part of the problem. 

Fixing What is Broken

After reading the initial article on January 11, I contacted the author to offer my insight on the district's woes. A follow up article published by the Star Tribune on January 12 included some of my comments. (I garnered a modest 80 words.) My recommendations included the standard control best practices:

  • Assigning and enforcing accountability for the oversight role to ensure policies are followed by everyone, including executives 
  • Clear P-Card policies and procedures (P&P) 
  • Mandated training prior to card issuance and annually to stress key P&P, such as what is and is not allowed 
  • No tolerance for policy violations, including missing receipts 
  • More strategic MCC blocks; for the district, this could mean blocking restaurants and similar unless the cardholder will be traveling 
  • Obtaining reports from key suppliers that show off-contract purchases; for example, with the office suppliers vendor, are cardholders purchasing higher quality goods than what are allowed? 
  • Effective auditing on an ongoing basis to catch and remedy issues if/when they emerge

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

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