Acquisition Card Policy, Procedures & Guidelines

Updated December 8, 2017

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Acquisition Card Homepage

Table of Contents

Acquisition Card Policy

1.0 Background

Acquisition Cards provide a convenient, less cumbersome way to buy and pay for low dollar value, low risk goods and services. They facilitate and simplify the procurement process for managers and employees, while streamlining the payment process for suppliers and departmental accounting units.

2.0 Effective Date

This policy is effective from the date of issuance.

3.0 Objective

The purpose of this policy is to provide a convenient and less burdensome way to buy and pay for goods and services in support of Employment and Social Development Canada (ESDC) and Service Canada (referred to hereafter as "the Department") objectives and mandate, while ensuring effective financial control.

This policy is complementary to the Treasury Board’s Directive on Payments.

4.0 Policy Statement

It is government policy to use Acquisition Cards to buy and/or pay for goods and services within the level of procurement authority delegated to the Department whenever it is economical and feasible to do so.

All Departmental policies for procurement and contracting of goods and services continue to apply when Acquisition Cards are used.

Acquisition Cards shall be used in a manner that will stand the test of public scrutiny in matters of prudence and probity, and reflect fairness, transparency and best value in spending of public funds.

5.0 Application

This policy applies to all employees of the Department.

6.0 Policy Requirements

6.1 Use of the Acquisition Card

Acquisition Cards must only be used to purchase goods and services for conducting government business (that is to say, for operational requirements), at the request of individuals with delegated authority, within the limitations established by Treasury Board and the Department's policies, and within the individual card’s credit limits and authorizations as established by the Funds Centre (FC) Manager (see section 6.5).

An individual Acquisition Card is not transferable and must be used only by the cardholder, which is the person whose name appears on the individual card. (Purchases can only be initiated and completed by the cardholder. This allows the cardholder to confirm that the purchase is not in contradiction to any applicable policies before the purchase is made).

Keep the card in a secure location and verify its presence on a regular basis. It must be kept in a locked area (such as a cabinet or drawer), at the office.

All Low-Dollar-Value purchases must be completed using the Acquisition Card unless one of the following exceptions applies:

  1. a mandatory standing offer indicates that we are not permitted to use the Acquisition Card as a purchasing tool;
  2. departmental standard terms and conditions must be used (e.g. a statement of work is required to ensure ESDC receives the services required, or the contract involves the creation of intellectual property);
  3. only one supplier can provide the good or perform the service and that supplier does not accept the Acquisition Card; and
  4. goods or services are being provided by another federal government department through an Interdepartmental Letter of Agreement or Memorandum of Understanding (except for Correctional Service Canada [CORCAN]).
6.1.1 Mandatory Use of Standing Offers and Supply Arrangements

Cardholders must use the Standing Offers (SOs) and Supply Arrangements (SAs) established by Public Services and Procurement Canada (PSPC) as a first option to meet their procurement needs, as per the list of ten commodities for which these tools are mandatory. This list is established by the Treasury Board Secretariat. If an SO exists, employees must buy from a vendor included on the SO and quote the Standing Offer number to ensure that the Crown receives the pricing and benefits of the Standing Offer.

6.1.2 Environmental Sustainability

Acquisition Card purchases should be made in the spirit of the Federal Sustainable Development Strategy (FSDS) and the Policy on Green Procurement. Therefore, cardholders and FC Managers should consider the life-cycle cost (environmental and financial) of the goods and services they buy, rather than only the up-front cost. For instance, a product that costs more money in the initial purchase price may actually last longer, consume fewer supplies, and/or require fewer repairs during its lifecycle.

In many cases, PSPC SOs include sustainability criteria, and so SOs are one good source for sustainable items. Further details on sustainable purchases are available in the Acquisition Card training and Green Procurement (C215) from the Canada School of Public Service.

6.2 Eligible Cardholders

Indeterminate employees and term employees (terms of 6 months or more) may be cardholders, with the approval of their FC Manager and of CFOB (IPPM). Term employees with terms of less than six months, casual employees, contractors, temporary help agency personnel, students (summer or co-op) and other non-public servants cannot be cardholders.

6.2.1 Mandatory Training

Before CFOB will issue an Acquisition Card or increase the limits on an existing Acquisition Card, the applicant must pass the mandatory on-line training course available free of charge. The instructions are on the Acquisition Card homepage. This course takes approximately 3 hours to complete. It includes a mandatory test with a minimum grade, which the applicant must pass before CFOB will process the application.

6.3 Tracked Assets

All tracked assets, as defined in the Department's Assset Management Policy, purchased with an Acquisition Card, must be tagged and tracked in the financial system (OMTM/SAP), in accordance with the ESDC Standard for Managing and Tracking Assets.

6.4 Issuing Payments to the Card Issuer

One national, Department-wide payment will be made each month that covers all of ESDC’s cards, to avoid paying interest charges and to maximize the early payment rebates payable to the Department. The departmental Chief Accountant is responsible for processing this payment. Individual cardholders cannot make payments toward a single card number.

6.5 Financial Control

Sufficient documentation must support all Acquisition Card purchases, to satisfy the requirements of the Financial Administration Act (FAA), and the Departmental Accounts Verification Policy.

As required by Section 32 of the FAA, Cost Centre (CC) Managers shall ensure that sufficient unencumbered balances remain available before authorizing a cardholder to make any Acquisition Card purchase. Therefore, the cardholder must obtain this authorization before making any purchase. The authorization can be limited to an individual purchase (“blanket authorization”), or can be on-going for a particular type and frequency of purchase (“blanket authorization”). The authorization must be in writing (e-mail is acceptable) and must include the approximate or maximum dollar value of the purchase.

The appropriate financial coding, including the correct line object, must be identified for each item purchased. Cardholders must identify the financial coding by following the Acquisition Card (AC) Processing – myEMS (SAP) process in myEMS (SAP). Please refer to the Department's Financial Coding Manual for guidance on Line Objects. The FC Manager is responsible for approving all transactions on the Acquisition Card monthly log, under section 34 of the FAA.

6.5.1 Restrictions

The Acquisition Card is subject to the following restrictions:

  1. only the person whose name appears on the card (the cardholder) may use it;
  2. the card must only be used to make authorized official government purchases, i.e. to meet operational requirements;
  3. the card must only be used within the card transaction limit and monthly limit;
  4. the card must not be used for travel-related expenses (use the Individual Designated Travel Card);
  5. the card must not be used for vehicle operating and maintenance expenses (use the fleet card);
  6. the card must not be used for cash advances;
  7. the card must not be used for personal purchases;
  8. the card must not be used for Interdepartmental transactions with other federal Government of Canada departments. Only the transactions with Correctional Services Canada (CORCAN) are permitted.
  9. the card must not be used for transactions with former public servants;
  10. the card must not be used where contractual clauses or statements of work are required, such as for purchases that require security clearances or privacy protections or purchases that involve creating new intellectual property; And,
  11. the card must not be used after the expiry date indicated on the card.
6.5.2 Misuse

Any misuse of the Acquisition Card will result in corrective action being taken by the Department (e.g. recovery of costs and/or disciplinary action). The following are examples of misuse of an Acquisition Card:

When a situation of employee misconduct or misuse is suspected or identified, the National Acquisition Card Coordinator must be advised and the appropriate FC Manager on the circumstances for investigation. Appropriate management within CFOB will then follow the appropriate subsequent administrative action. This may include the cancellation of the Acquisition Card for the cardholder and/or loss of delegated authority for the FC Manager.

In the case of misuse of cards or fraud, management is responsible to take disciplinary action within their authority, as well as preventive measures to avoid re-occurrence, when appropriate.

Employees will be held personally responsible for any losses to the Crown resulting from fraud or misuse and action will be taken to recover those losses. All employees associated with the use of the Acquisition Card should therefore be familiar with the government policy surrounding this matter, and are advised to re-take the Acquisition Card training before the card can be reinstated.

The consequences for misuse are detailed in Annex H: Consequences for Acquisition Card Misuse

6.5.3 Monitoring

The Chief Financial Officer Branch (CFOB, NHQ) will conduct continual monitoring of Acquisition Card purchases and logs, to ensure compliance with the requirements of this policy, including but not limited to the requirements of sections 6.5.1 and 6.5.2 above.

7.0 Procedural Requirements

7.1 Expenditure Initiation

A FC Manager with appropriate delegated authority must provide in writing (e-mail is acceptable) an expenditure initiation document to give authorization under Section 32 of the Financial Administration Act for a cardholder to purchase goods or services from a vendor, before the purchase is actually made (see section 6.5). Any requirements not covered by an existing blanket authorization previously established by the FC Manager require an individual written authorization from the FC Manager. In any case, the appropriate authorization(s) must be kept on file (e.g. the cardholder must keep a copy of the e-mail authorization from the FC Manager).

7.2 Segregation of Duties

Internal control principles and the proper segregation of duties require that at least two people be involved in the purchase/payment process. Therefore, FC Managers or any other staff with Section 34, Financial Administration Act, signing authority should not normally be cardholders. If such an employee is a cardholder, the next level of management (roll-up FC) must approve that cardholder’s monthly electronic logs. (See section 6.5.)

7.3 Card Limits

An individual transaction on the Acquisition Card must exceed neither that card’s transaction limit nor its monthly limit, and must be in accordance with this policy and the Acquisition Card Quick Reference Guide. The card limits (transaction limit and monthly limit) include all associated costs such as tax, delivery, installation and transportation charges.

7.4 Departmental Guidelines

Each Acquisition Card must be issued to meet operational requirements and the associated limits must reflect the intended use. All request for card limits that exceed the general Departmental guidelines (transaction limit of $10,000, and/or monthly limit of $25,000 and/or only one Acquisition Card per division under a Director) require approval from the Director of AMPP (IPPM, CFOB) before the card is issued/updated.

7.5 Internet Transactions

Cardholders may use the Acquisition Card to buy and pay for items over the Internet. However, users are encouraged to be prudent and it is recommended that only transactions with reputable companies and over secure sites be authorized. This means companies that have been established for some time and that are known to the Department.

ESDC currently allows acquisition cardholders to use PayPal as a payment mechanism and monitors 100% of these transactions. Invoices are required as well as documentation demonstrating that the cardholder has made every attempt to find a vendor who accepts the Government acquisition card before using a vendor who requires payment through PayPal.

In addition, the internal control procedures described in this policy and in the Treasury Board Directive on Payments must be adhered to for all internet transactions.

Please refer to Annex B for further details.

7.6 Hospitality

Acquisition Cards may be used for hospitality if the requirements have been pre-approved in accordance with the Departmental Travel, Hospitality, Conference and Event Expenditures Policy (PDF, 194 KB).

7.7 Applicable Taxes

ESDC should, as a best practice, claim exemption from paying provincial general retail sales taxes in the name of Canada. This includes purchases made with Acquisition Cards. The cardholder must follow the guidelines below, based on the province where the good or service is to be delivered.

The federal government (and ESDC) must pay GST, HST and QST, but not PST.

Pay GST for goods or services delivered in North West Territories, Saskatchewan: Tell the vendor that you are using the Exemption Certificate. If the vendor requests more detail, the standard wording is, "This is to certify that the goods and/or services ordered or purchased by Employment and Social Development Canada and Service Canada are being purchased with Crown funds and are therefore not subject to sales and consumption taxes of this Province/Territory."

Pay GST for goods or services delivered in British Columbia and in Manitoba.

Pay GST for goods or services delivered in Alberta, Nunavut, Yukon: These areas do not have a PST.

Pay full HST for goods or services delivered in Ontario and/or the Atlantic Provinces. Per federal law, the federal government (and ESDC) must pay full HST.

Pay full GST and QST for goods or services delivered in Quebec. Per provincial law, the federal government (and ESDC) must pay the Quebec Sales Tax (QST).

8.0 Roles and Responsibilities

8.1 Chief Financial Officer

Accountable for the provision of complete financial, accounting and administrative services to the Department, including overall management of the acquisition card program, assigning a National Acquisition Card Coordinator and ensuring Treasury Board policies concerning acquisition cards are respected. These responsibilities are managed in collaboration with the Regional Executive Heads.

8.2 Deputy Chief Financial Officer

Accountable for the provision of complete financial, accounting and administrative services to the Region, ensuring regional management of the acquisition card program, Treasury Board policies concerning the acquisition cards are respected, and assigning a National Acquisition Card Coordinator.

8.3 Director General, Investments, Procurement and Project Management Directorate (IPPM)

Responsible for ensuring efficient and effective delivery of services in support of departmental operational requirements for the acquisition card program.

8.4 Director General, Integrated Corporate Accounting and Accountability Directorate (ICAAD)

Accountable for the provision of complete financial services related to the departmental Acquisition Card program and the Department's programs including corporate planning, analysis and resource management, invoice payment as well as Department compliance with Government of Canada accounting and reporting requirements.

8.5 Director General, Internal Audit Services Branch (IASB)

Responsible for providing senior management with adequate assurance on key aspects of the Department's risk management strategies and practices, management control frameworks and practices, related to the Departmental acquisition card program.

8.6 Director, Assets Management Policy and Procurement (AMPP)

Responsible for coordinating the issuance, renewal and control of Acquisition Cards; for developing and communicating departmental Acquisition Card policy and procedures; for ensuring an appropriate training plan to ensure that all those involved in the use and processing of cards are aware of their roles, responsibilities and obligations; and for ensuring compliance with Treasury Board and departmental policy and procedures through the development and implementation of a monitoring plan.

8.7 Funds Centre Managers

Responsible for ensuring compliance with the Department's Acquisition Card Policy in their day-to-day activities. For further details, consult Annex C and the Acquisition Card training..

8.9 National Acquisition Card Coordinator

Responsible for the overall issuance, coordination, monitoring and control of the Acquisition Card program for the Department. For further details, consult Annex E and the Acquisition Card training.

8.10 Cardholder

Responsible for the use of the Acquisition Card to buy and pay for goods and services, once authorization has been given by the FC Manager (as per section 7.1 above), within Treasury Board and the Department's Acquisition Card policies. For further details, consult Annex F. All cardholders must take the Acquisition Card training, before CFOB will issue a card or increase the limits.

Inquiries

Inquiries and requests for amendments relating to this policy should be directed to:

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