SEF Corporate Credit Card Policy

1. PURPOSE

SEF Energy, LLC and its subsidiaries (“SEF”) utilize the JP Morgan Chase Spend platform to process business expenses incurred on behalf of the company, both via the SEF Card and for Out Of Pocket (“OOP”) expenses.  The purpose of this policy is to define acquisition, usage and reconciliation processes for employees of SEF for both SEF Card and OOP expenses.

1. APPLICABILITY

This policy applies to all employees of SEF who may:

• Currently hold or anticipate holding an SEF Card.
• Be involved in the documenting and/or reconciliation of SEF Card purchases or OOP expenses.

1. GENERAL

1. Employees with an SEF Card or OOP expenses and their supervisors are responsible for ensuring that they adhere to the SEF Card and Expense Policy, thereby ensuring adequate controls are exercised to minimize the risk that OOP expenses and SEF Cards are used for fraudulent purposes or are disqualified for tax deduction due to not meeting a business purpose.  

1. SEF uses the JP Morgan Chase Spend Center platform to administer the SEF Card and OOP reimbursement and employees submit expense reports through the Spend Center module.

1. No employee will be issued access to the JP Morgan Chase Spend Center platform or an SEF Card prior to completing and acknowledging this SEF Card and Expense Policy.   

1. BACKGROUND

1. The primary method of payment at SEF is through reconciled customer invoices and corporate payments executed by the Accounts Payable group.  This method ensures that payment liabilities are processed through the proper channels and that compliance and financial controls are met.   SEF acknowledges that the primary method is not the available method for all business functions.  As such, select employees are reimbursed for OOP expenses and/or provided with the SEF Card.

1. POLICY

1. Eligibility 

1. SEF Cards In order to be eligible for an SEF Card, an employee must meet one or more of the following criteria:

• Represents the company in a manner that requires frequent travel, lodging, entertainment, or fuel purchases.
• Regularly purchases expense items for use in the business.
• Receives explicit consent of the SPENDCENTER Corporate Administrators or approval by an appropriate company employee.

SEF employees with responsibility and authorization for making small purchases on behalf of SEF may complete an application for an SEF Card by contacting the Corporate Administrator.  The application is to be approved and submitted to the Corporate Administrator by the employee’s manager.  Although the card is issued in the employee’s name, it is the property of the company and is only for approved company purchases.

1. OOP Reimbursement All employees are eligible for OOP reimbursement for valid business expenses in accordance with this policy.

1. Roles and Responsibilities

5.2.1      Transactor.  An employee who has been given access to SpendCenter to enter OOP expenses (“OOP User”) or reconcile SEF Card (“Cardholder”) transactions.  The employee will submit OOP expenses and use the SEF Card in accordance with this policy, maintain security of the SEF card, provide the appropriate documentation for all purchases and reconcile the OOP and SEF Card transactions within a reasonable period of time.  The Cardholder will be responsible for resolving and/or reporting any disputed purchases on the SEF Card. 

5.2.2      Approver. An employee with authority to approve SEF Card purchases and OOP expenses.   Typically, the employee’s supervisor unless otherwise delegated.  The approver will be responsible for reviewing and approving weekly OOP expenses and cardholder statements and receipts to ensure transactions are appropriate, for legitimate business and in compliance with this policy.  

5.2.3      Corporate Administrators.  SEF employees charged with i) auditing JP Morgan Chase Spend Center platform transactions for all SEF employees for compliance with this and other corporate policies;  ii) providing statistics on usage and spend to management; iii) resolving fraud claims; amending credit limits and iv) providing entries for posting expenses and initiating remittances.   

1. Principle Use and Limits 

1. The SEF Card and OOP reimbursement are to be principally used for i) business travel; ii) authorized business meals or individual meals when traveling ; iii) client entertainment and; iv) other de minims business expenses. As a contingency, Transactors may purchase inventory or other material to be used in the business. Normal course of business purchases of inventory or other material to be used in the business should be invoiced to the company and payments executed by the Accounts Payable group.

1. In the event the purchase of purchases of goods for resale and/or manufacturing is necessary, most of these types of purchases are exempt from state and local taxes.  The documentation is available upon request from the accounting department.  All purchasers shall provide this documentation to vendors at the time of order/purchase in order to ensure they do not pay sales tax.  For confirmation whether a purchase of goods falls under resale or manufacturing, contact the accounting department.

1. SEF Cards will have set transaction and monthly limits. Cardholders will not split charges in order to circumvent these established limits.  To have a limit temporarily raised, employees will obtain supervisor approval and contact the Corporate Administrator.

1. Inappropriate Use

5.4.1      The SEF Card and requests for OOP reimbursement are only to be used for legitimate business purposes. Improper use of the SEF Card or claims for ineligible OOP reimbursement may be considered misappropriation of funds and a violation of this policy and subject to disciplinary action up to termination. SEF Card activity will be audited on a regular basis.

1. The SEF Card or claims for OOP reimbursement is intended to simplify purchasing by providing an alternative form of payment and will not be used to bypass supplier authorization, purchasing or payment approval process.

1. The SEF Card or claims for OOP reimbursement is not for personal use.  If an employee uses the SEF Card for or claims an OOP reimbursement for a personal expense, the employee’s manager will be notified and the charges marked as personal in SpendCenter.  Employees will be responsible for reimbursing the company.  The SEF Card may not be used for cash advances for any reason. Claims for ineligible OOP reimbursements will be denied.

1. If any transaction is found to be a willful breach of policy, the expense will be marked as personal in SpendCenter and the Corporate Administrators will be notified.   The rejected transaction will be marked as personal in SpendCenter and deducted from the employee’s paycheck.   If the approver requires additional information/documentation, the approver will return to the cardholder for that information.  

1. Expense Substantiation  

1. Employees will submit appropriate documentation and receipts provided by the vendor for each purchases made with an SEF Card or OOP expenses into SpendCenter.   Each expense will include:

5.5.1.1. For Travel, Lodging and Business Meals

• Vendor name
• Purchase date
• Itemized receipt
• Total purchase amount
• Correct expense classification
• Business purpose and attendees

5.5.1.2.For Meals and Entertainment (Authorized Sales Employees Only)

• Vendor name
• Purchase date
• Itemized receipt
• Total purchase amount
• Correct expense classification 
• Business purpose and customer attendees

1. For all other purchases

• Vendor name
• Purchase date
• Itemized receipt
• Total purchase amount
• Correct expense classification
• Business purpose to include well site or project names, if applicable.

5.6      Reconciliation and Approval

5.6.1      Cardholders will be responsible for reconciling their OOP expenses and SEF Card statements through SpendCenter.  All transactions will be reconciled by the Transactor within 10 days of the transaction posting in Spendcenger and approved or rejected by the Approver in SpendCenter.   

NOTE:   Statements with no transactions and zero expenses charged to the card are exempt from the Review and Approval requirements.  A cardholder does not need to review and approver does not need to approve a statement with a balance of zero dollars and no transactions.

5.6.2      It is the Approver’s responsibility to ensure proper adherence to this policy by assigned Transactors. If the approver requires additional information/documentation, the Approver will return to the cardholder for that information.

5.6.3      If the Approver discovers activity not in accordance with this Policy, the Approver will, in accordance with Section 5.4.3, i) reject the request for reimbursement if an OOP reimbursement request; or ii) notify the Corporate Administrator for payroll deduction in an SEF Card expense.

5.7        Disputing SEF Card Charges

5.7.1      A transaction dispute occurs when a transaction does not match the amount on the documentation supporting the transaction.  In the even that a transaction is disputed, an item is returned, or some other event occurs that would cause the vendor to post a credit, the cardholder will be responsible for reviewing the statement in the SpendCenter and ensuring the adjustment has been properly recorded.

5.7.2      In the case of a transaction dispute between the cardholder’s statement and the retained receipts, the cardholder will contact the vendor.  If the dispute cannot be resolved with the vendor, the cardholder will contact the Corporate Administrator to file a transaction dispute.

5.8        Employment Changes

5.8.1      In the event that a cardholder or approver has any type of change in status of employment (termination, change of departments, etc., the Corporate Administrator will either assign the Transactor to a new Approver or cancel access to SpendCenter and cancel the SEF Card, if applicable.  In the event that the SEF Card is canceled, the supervisor will, if possible, take possession of the SEF Card and return it to the Corporate Administrator.

5.9        Theft/Loss

5.9.1      The SEF Card is issued in the employee’s name and that employee is responsible for the security of that card.  Employees losing their SEF Card, or whose card is stolen, will contact the Corporate Administrator as soon as possible.  In the case of theft, employees may be required to furnish a copy of any related police reports.  Employees will close or monitor accounts related to lost or stolen cards for fraudulent charges.

5.10     Fraud

5.10.1   Cardholders will notify the Corporate Administrator upon detecting any fraudulent or unauthorized activity on their SEF Card. Cardholders will timely respond to any inquiries from either JP Morgan Chase or the Corporate Administrator regarding potentially fraudulent activity. Compromised SEF Cards will be cancelled by the Corporate Administrator and reissued.

1. USE OF THE SPENDCENTER PLATFORM 

1. SpendCenter is the portal that provides access to expense reporting platform.

1. The SpendCenter platform is for use by company credit card holders for expense reconciliation and by out-of-pocket users to submit requests for reimbursable expenses.

1. The website is https://spendcenter.jpmorgan.com   

1. Company credit card transactions show up under the “Transactions” tab, while expenses requiring submission for personal reimbursement may be added under the “Reimbursements” tab.

1. The SpendCenter Mobile App is available in the App Store for all major smartphones.   The app allows users to snap and upload photos of their receipts directly to the SpendCenter platform for reconciliation.  

1. RESPONSIBILITY

7.1.1    The VP of Accounting and Financial Reporting or above is responsible for the content of this policy.  This policy will be reviewed at least every three years.