Where should you draw the line? New guidance on the appropriate use of corporate credit cards

Corporate credit cards are a convenient and efficient way for University personnel to manage work‑related expenses, including for travel, entertainment or those other small value purchases that are needed to get the job done.

An efficient process intended for essential purchases

While it’s an easy and operationally effective way to manage business expenses, it’s not always easy to decide what sort of expenditure could or should be considered essential to your work. It’s not enough to be able to justify an expense in your own mind - it must be objectively clear that any charges made to a corporate credit account are necessary to achieve or progress a work outcome.

The Office of the South Australian Auditor-General which regularly audits the University, recently examined and reported on the management and use of credit cards in three local councils and recommended, among other things, that greater attention be given to justifying the business purpose of expenditure.

The lines that are drawn around credit card use need to be very clear to everyone, including to external auditors and integrity agencies.

Blurred lines have consequences

A few years ago, staff at a university in the eastern states were in the news for having a good time.

They were a hard-working, dedicated team of people, collectively having great success in progressing the university’s objectives. To celebrate their success and reinforce camaraderie, the team would regularly host Friday afternoon drinks, inviting colleagues from other sections who supported their work to join them.

Trouble was, the news story wasn’t about their success. It was about their use of corporate credit cards to purchase alcoholic drinks for the events. Turns out that one of their co-workers recognised that the regular use of public funds for a regular social gathering of colleagues had stepped over the line of legitimate university expenditure. The team’s conduct was reported.

The consequences?

• An inquiry into the alleged misuse of university funds
• Investigation into the conduct of all the individuals who had used their corporate credit cards to make purchases for the events and those who had routinely approved the expenditure
• Unwanted media attention and serious reputational damage to the team and to the university.

Either side of the line - what is and what isn’t appropriate

Corporate credit cards must only be used for legitimate expenditure that is reasonably necessary for the operation of the University. Recently revised Corporate Credit Card Procedures include an indicative list of the types of purchases that would be considered appropriate and those that would not.

Generally, an expense that is personal in nature should not be charged against a University credit card. Your corporate credit card should never be used for personal purchases – even if you intend to pay it back. So, accidentally leaving your personal card at home is not a legitimate reason to put a personal expense on your corporate card.

Personal purchases should not be made using a corporate credit card regardless of the source of the funds. This means you can’t acquit a charge against a consultancy fund unless it is apparent that the purchase is related to an academic outcome. Refer to the University’s Research Grants, Contract and Consultancies Policy for more details about consultancy funds.

Your justification for each approved University expense must be objectively clear and documented for every corporate credit card transaction.

Being clear about appropriate purchasing decisions

The Corporate Credit Card Procedures and the University’s online Corporate Credit Card portal can give you clarity about appropriate purchasing decisions using University issued credit cards.

The Procedures also clarify:

• Who has authority to issue, set credit limits and cancel corporate credit cards
• Training for personnel who use corporate credit cards or approve expenditure
• What sorts of purchase are appropriate, and what’s not
• Record-keeping and checking for acquittals
• How to repay accidental personal purchases
• Returning a corporate credit card.

If you need assistance in deciding which side of the line your intended purchase might be on, you should discuss with your area’s business manager or the Expense Management Team.

More information about the proper use of corporate credits cards is available on the Finance and Procurement Services website.