PURCHASING AND OUTGOING PAYMENTS PROCEDURES

Transcription

1 PURCHASING AND OUTGOING PAYMENTS PROCEDURES PREAMBLE DEFINITIONS PART 1. DECISION TO PURCHASE 1. Application of Purchasing and Outgoing Payment Procedures 1.1. Goods and services 1.2. Payments that are not for goods and services 2. Determining nature of purchase 2.1. Purpose 2.2. Specifications 3. Choosing and evaluating suppliers PART 2. ORDERING, RECEIVING AND PAYING 4. Choosing a purchase method 5. Authorities 6. Arranging purchase through a System-generated purchase order 6.1. Create a purchase order 6.2. Amend or cancel a purchase order 6.3. Transmitting purchase order to vendor 6.4. Credit application requests from vendor 7. Vendor Accounts for System-generated purchase orders 7.1. Creating a Vendor Account 7.2. Amending a vendor account 8. Receiving, inspecting and receipting goods/services ordered via a System-generated purchase order 8.1. At point of delivery of goods or completion of services 8.2. Disputing goods/services supplied or not received 9. Paying vendor invoice for goods/services 9.1. Invoices where there is no prior System-generated purchase order 9.2. Invoices for goods/services ordered through a System-generated purchase order 9.3. Review and resolve match exception invoices PART 3. METHODS OF PAYMENT 10. University standard practices Urgent payments Rejected payments Special arrangements for cheques Cancelling payments 11. Disposal PART 4. MONITORING AND REVIEW 12. Monitoring and review practices Vendor creation and bank account detail changes Vendor removal Purchase order closure Un-presented cheques OVERVIEW University faculties and divisions require the procurement of goods and services to support their activities. These procedures have been designed to ensure that goods and services: i. are obtained expeditiously and economically ii. represent good value for the University iii. are able to be funded by the responsible faculty or division iv. are obtained by a process that treats suppliers equitably and fairly and provides a clear audit trail. All procurement decisions and consequential processes must be made in accordance with the University s Financial Management Policy, the Strategic Procurement Procedures and these Procedures. Payments for purchases (outgoing payments) are made through a centralised payment system operated by Accounts Payable in Financial Services and the Faculty of the Professions finance team, but payment authorisations are faculty and division responsibilities. Faculty and division finance managers may specify local procedures (not inconsistent with these procedures) which must be applied in addition to these procedures. DEFINITIONS Accounts Payable: for the purposes of these procedures, references to Accounts Payable responsibilities include Faculty of the Professions finance team responsibilities Domestic goods and services: goods and services purchased within Australia 1

2 EFT: electronic funds transfer International goods and services: goods and services purchased outside Australia IMT: international money transfer Nominated Receipting Officer: an officer authorised by the relevant faculty or division finance manager to receipt goods and services, purchased via a purchase order, in the System Nominated Purchasing Officer: an officer authorised by the relevant faculty or division finance manager to create purchase orders in the System System: the PeopleSoft Financial Management System used by the University. PART 1. DECISION TO PURCHASE 1. Application of Purchasing and Outgoing Payment Procedures 1.1. Goods and services These procedures apply to the procurement of all goods and services using University funds, whether the revenue source be operating grants, research grants, consulting funds or any other source. The only exceptions are as listed in the following table: Nature of work Responsibility Process Acquisition of land & buildings and leases Director, Infrastructure As specified in Infrastructure Branch business processes Motor vehicles and motor fuel Appropriate delegated authorities in faculties and divisions As specified in Motor Vehicle Procedures Travel and entertainment expenses (including mileage reimbursements and taxi fares) Appropriate delegated authorities in faculties and divisions As per Travel and Entertainment Policy and Procedures and Credit Card Procedures and Expense Goods which are more efficiently acquired through petty cash (maximum value of $100 excluding GST) Goods or services which are initially purchased at staff member s own expense, and for 2 Appropriate delegated authorities in faculties and divisions Appropriate delegated authorities in faculties and divisions Management System As per Petty Cash Procedures As per Reimbursement Procedures (in development) which reimbursement is sought Utilities (energy and water) Director, Infrastructure As specified in Infrastructure Branch business processes Insurance Premiums General Counsel As specified by General Counsel and Manager, Insurance Internal trading, i.e. where goods and services are acquired from within the University and payments are transferred between one area of the University and another Appropriate delegated authorities in faculties and divisions As per General Ledger Journal Procedures Examples of items that are goods and services: the supply of a specified quantity of tangible materials (e.g. gases, chemicals, stationery, consumables) at a set time or at periodic intervals the supply of a less tangible commodity or service, such as advertising placement the maintenance of property and equipment the leasing of equipment a service by a contractor or consultant. Goods which are defined as assets are also subject to the Asset Management Procedures Payments that are not for goods and services These procedures apply in part to payments that are not, strictly, for goods and services provided by third parties, for example:

3 a cost contribution by the University to a partner organisation in respect of a shared endeavour a donation by the University to a third party. The University requires an invoice in order to generate a payment to them for system, regulatory and audit reasons. For items that are not goods and services, the following processes apply: Purchase method: Procedure 4 (choosing a purchase method). If purchase order method selected, apply Procedure 6 (arranging purchase through a Systemgenerated purchase order) and, if necessary, Procedure 7 (vendor accounts for System-generated purchase orders) also. Payment: Procedure 9 (paying vendor invoice for goods/services). 2. Determining nature of purchase 2.1. Purpose Goods and services must only be purchased to support a University activity, and not for the benefit of individual staff members or external entities. Staff member benefit: In exceptional circumstances, approved by the Director, Human Resources, or in accordance with Human Resources policies and procedures, goods or services may be purchased for a staff member in their private capacity: for example, relocation expenses. Note that these may have fringe benefits tax (FBT) implications. Third party benefit: In exceptional circumstances, approved by the Chief Financial Officer, goods or services may be purchased on behalf of a third party (not University or staff): for example, a purchase to benefit a University-related entity Specifications Responsibility: In the first instance, the end-user making the purchase request; but also all staff involved in the purchase decision at faculty or division level Clarify: the uses and outcomes required of the goods and services and whether they are in keeping with University purposes the characteristics required to meet those outcomes whether there are any regulatory or other compliance obligations applying to the goods or services (e.g., Work Health & Safety requirements, prohibited substances) and whether they can be met whether there are any international compliance requirements (see Procedure 2.2.1), and where the goods or services are to be delivered. For assets (and see Asset Management Procedure), also clarify: whether any alternative University asset could be upgraded or adapted to meet the outcomes required whether there are related maintenance requirements and how these will be met whether there is appropriate space and other facilities required to accommodate the purchase, and whether the proposed purchase is compatible with existing equipment and facilities. The more expensive the goods or service, the more clarity and documentation is required around the specifications, so that detailed evaluation can be made of whether the goods or services offered meet the University s requirements. Note that quotes are required from all suppliers except University preferred suppliers, as specified in the Strategic Procurement Procedures; and that a Tender Evaluation Panel is required for purchases of $200,000 or more International compliance requirements: For the purchase of international goods (imports from outside Australia), additional Australian and international regulatory and compliance requirements may apply. 3

4 Quarantine: Are the proposed import materials likely to be subject to quarantine action? If so, obtain an import permit from DAFF Biosecurity before the purchase order is created, by submitting an Import Permit Application from DAFF Biosecurity. Once the import permit is received, it must be lodged with the purchase order. Customs clearance: Is any customs duty likely to be payable on the purchase? Has this been factored into the overall cost? Consult the Strategic Procurement team for more information. Country of origin requirements: Do any laws of the country from which the purchase is being arranged apply? For example, the export of antiquities or significant cultural objects is prohibited from many countries. Ensure documented advice on compliance is obtained from the supplier or appropriate reputable agency. Note: The Foreign Exchange Risk Management Policy requires that all purchases in foreign currency of $AUD200,000 or more must be hedged. Contact the Treasury Manager, Financial Services, to arrange. 3. Choosing and evaluating suppliers Apply the Strategic Procurement Procedures. In summary, these procedures require: i. purchasers to use University preferred suppliers, unless there is no preferred supplier for the goods or services required, or an exemption is granted; ii. quotes to be obtained from suppliers before any purchase order is lodged or created, as follows: purchases less than $20,000 one quote; purchases between $20,000 and less than $200,000 one quote if preferred supplier used, otherwise three quotes; purchases of $200,000 or more formal Request for Tender, Request for Proposal, or Expression of Interest sought, with evaluation by Tender Evaluation Panel; and iii. purchasers to evaluate potential suppliers against the principles of value for money, supplier reputation and reliability, warranties, support and maintenance, and sustainability, and to do so in an ethical honest and diligent manner. PART 2. ORDERING, RECEIVING AND PAYING 4. Choosing a purchase method Once the supplier is selected, the method of purchase can be chosen, in accordance with the following table: Purchase value (excluding GST) Under $ Purchase method EITHER: Order direct from the supplier using University Payment Card by authorised delegate. The Credit Card Procedures apply to this type of transaction. OR: Order direct from the supplier and receive an invoice once goods or services are supplied. Procedures 5 and 9.1 apply. OR: Order through PeopleSoft Financial System-generated purchase order, in accordance with Procedures 5, 6, 7 (if necessary), 8 and 9. $5000 and over Purchase through PeopleSoft Financial System-generated purchase order, in accordance with Procedures 5, 6, 7 (if necessary), 8 and 9. Use of a purchase order is compulsory for purchases of all goods and services to the value of $5000 and over, unless exemption has been granted by the Manager, Financial Operations, or Associate Director, Strategic Procurement; or where the services are provided by external service providers who have approved independent contractor agreements for teaching. The University does not permit direct debiting from a University account for any purchase arrangement. 5. Authorities Only selected positions in faculties and divisions have authority to authorise expenditure on goods and services and process purchasing transactions.

5 These authorities are set out in detail in the list of Expenditure Limits on the University s governance/delegations website. In authorising a purchase, the authoriser is declaring that: there are sufficient funds available within the relevant cost centre to cover the purchase cost; and that the purchase is required for University purposes. Under no circumstances is splitting of purchase orders permitted (i.e., creating two or more purchase orders for what would normally be a single transaction) as a means of avoiding an expenditure threshold. 6. Arranging purchase through a System-generated purchase order 6.1. Create a purchase order Step 1 Responsibility: Staff member seeking purchase for University purposes i. Provide relevant Nominated Purchasing Officer with documentation to purchase goods or service, addressing the matters in Procedures 2 & 3, and in accordance with any local practices required by the faculty or division finance manager. Purchase orders can only be formally created by an authorised Nominated Purchasing Officer. Each faculty and division has its own list of authorised nominated purchasing officers (refer to faculty or division finance manager). Step 2: i. Check that selected supplier is on Vendor List (apply Procedure 7 if not). ii. Check that supplier s address is in System. iii. Create purchase order on System, ensuring correct Expense Account chart string from the Chart of Accounts is used. iv. Attach relevant quotes and information relating to the purchase. v. If purchase order is for an international purchase of $200,000 or more, consult the Treasury Manager, Financial Services, before the order is created, as required by the Foreign Exchange Risk Management Policy. vi. Select and workflow to the appropriate expenditure approval authority for approval. Step 3: Responsibility: Expenditure approval authority i. Ensure that purchase is appropriate and for University purposes. ii. Confirm that sufficient funding is available for purchase and that the total cost is within their delegation limit. iii. If satisfied of i and ii, authorise expenditure as per delegated authority, to finalise the purchase order. This authorisation finalises the purchase order Amend or cancel a purchase order Once a purchase order is submitted, it should not be amended. i. To cancel a purchase order, refer to the Purchasing Training Manual and follow the steps to cancel the purchase order in the system. ii. If the purchase order has already been despatched, contact the vendor to advise that the order has been cancelled Transmitting purchase order to vendor Purchase orders are ed to the vendor within one hour of authorisation by the expenditure approval authority. In exceptional circumstances, if an address is unobtainable, a purchase order can be faxed to the vendor. 5

6 6.4. Credit application requests from vendor Responsibility: Person receiving request i. Submit any request for credit applications (i.e., for the University to have credit with a vendor) to the Compliance Officer, Accounts Payable, for processing. 7. Vendor Accounts for System-generated purchase orders Each supplier (vendor) of goods and services must have its own vendor account through which that supplier s invoices will be processed. There must be only one vendor account per supplier in the System. Once a vendor account is created it is used for all purchases from that vendor, regardless of who first requested the account. The Manager, Strategic Procurement, has authority to cancel vendor accounts if they are not in the University s interests. The relevant Nominated Purchasing Officer/s and the Compliance Officer, Accounts Payable, will be notified of such cancellations Creating a Vendor Account Step 1 i. Be satisfied that vendor is required and appropriate for proposed purchase. ii. Ensure that vendor is not already in System. iii. Complete Creating/Amending Vendor Request Form, ensuring that vendor s EFT or IMT details are included, that any specific payment terms required by the vendor are included, and that relevant supporting documentation is attached as required. iv. Obtain authorisation as required, and submit form to Compliance Officer, Accounts Payable. Step 2 Responsibility: Compliance Officer, Accounts Payable i. Check whether vendor is already in System vendor list. ii. Review request form for completeness and appropriate authorisation. iii. Perform independent check of bank account details by contacting vendor. iv. Create vendor account (if satisfied it appropriate to do so). v. Attach paperwork in System to vendor creation file. vi. Notify Nominated Purchasing Officer that vendor account created (with request to contact Compliance Officer immediately if they did not request the account) Amending a vendor account Step 1 Responsibility: Receiver of request for change i. Forward all requests from vendors for change (e.g., change of vendor name, address or bank details) with a Creating/Amending Vendor Request Form, to Compliance Officer, Accounts Payable, with all relevant documentation. Step 2 Responsibility: Compliance Officer, Accounts Payable i. Review request and any information necessary to validate and confirm change to vendor account. ii. If bank account details are to change, perform independent check of bank account details by contacting vendor. iii. Activate (or reject) change. 6

7 8. Receiving, inspecting and receipting goods/services ordered via a Systemgenerated purchase order 8.1. At point of delivery of goods or completion of services For goods: Step 1: Responsibility: Any staff member in relevant faculty/division who receives goods i. On notification that goods have been delivered: Review goods at point of delivery, and confirm quantity, condition and compliance with order specification. Notify the relevant Nominated Receipting Officer. If goods not in good order, refuse goods and notify relevant Nominated Receipting Officer immediately. Step 2: Responsibility: Nominated Receipting Officer i. Record receipt (or rejection) of the goods on the System, including details of the actual quantity received (not ordered) and the date of receipt. This is essential to ensure the supplier is paid. This will result in a Receipt Number, which will be required for invoice payment (see Procedure 9.2). ii. If there is no corresponding purchase order: Investigate whether goods were purchased using any other method. If it is confirmed that goods were not ordered, refuse the goods. If order process cannot be identified, exercise discretion on whether to accept or reject goods. Apply any required local business procedures. For services: Step 1: Responsibility: Any staff member receiving the service i. When service complete, notify Nominated Receipting Officer that service received, and whether service complied with the purchase order specification. Step 2: Responsibility: Nominated Receipting Officer On notification that service has been completed: 7 i. Check System for corresponding purchase order. ii. Record receipt (or rejection) of the services on the System, including any changes from original order specification. This will result in a Receipt Number, which will be required for invoice payment (see Procedure 9.2). iii. If report received that service not in good order or not compliant with order specification, notify Nominated Purchasing Officer. (In practice, Steps 1 and 2 may not happen until the invoice is received.) 8.2. Disputing goods/services supplied or not received i. Follow up with vendors re undelivered or partially delivered goods and services. ii. When notified that goods or services received are not in good order or not compliant with order specification, advise Accounts Payable that payment is to be withheld, and follow up with vendor in timely fashion, as other University purchase orders with that vendor may be affected. iii. When goods are returned because they are not in good order or not compliant with order specification, ensure there is a receipt or other evidence that the goods have been returned. iv. When goods are returned or services disputed after the vendor s invoice has been paid, seek a credit or refund from the vendor.

8 v. Keep record of reasons for returning/disputing goods or services, and of any discussions with vendor. 9. Paying vendor invoice for goods/services All invoices for domestic goods or services must be valid tax invoices. To be valid, the tax invoice must: be clearly marked Tax Invoice ; display the ABN (Australian Business Number) and the name of the supplier of the goods/services; include the words Price includes GST or similar; and give a description of the type of goods/services provided. All tax invoices over $1000 must be addressed to The University of Adelaide as required by the Australian Taxation Office. All invoices for international goods or services must be compliant with the laws of the country in which the invoice was produced. The Foreign Exchange Risk Management Policy is applied by Accounts Payable when processing international invoices Invoices where there is no prior System-generated purchase order (Note that purchases over $5000 require a System-generated purchase order: see Procedure 4). i. If a trade-in was involved in a goods transaction, ensure the invoice separately lists the full cost of the new goods and the proceeds of the traded asset (see Asset Management Procedure). ii. Ensure that goods or services have been provided to satisfaction of end-user. iii. Annotate invoice with chart string from Chart of Accounts to be used for payment (and a separate revenue asset proceeds chart string if there is a trade-in value). iv. Obtain signature of relevant expenditure approval authority. v. Forward invoice to Accounts Payable for payment. vi. If purchase is a Local Asset, ensure purchase is registered on Local Asset Register (see Asset Management Procedure) Invoices for goods/services ordered through a System-generated purchase order All purchase orders specify that invoices are to be sent to Accounts Payable. Responsibility: Accounts Payable staff i. Process invoice received by matching to corresponding goods/services received record on the System. ii. Review the resulting three-way-matching invoice, goods/services received record, and purchase order: If all matches are consistent (i.e., not more than $100 above the purchase order value or, where purchase order value $100 or less, not more than 10% above the purchase order value), mark invoice for payment in System. If matches are inconsistent, the System will refuse payment and generate a match exception (see Procedure 9.3). iii. Scan and attach invoice in System Review and resolve match exception invoices Step 1: Responsibility: Accounts Payable Timeline: Daily i. Review match exceptions. ii. Send match exception invoice to relevant Nominated Purchasing Officer for further approval by expenditure approval authority. Step 2: i. Obtain the required approval from the relevant expenditure approval authority. 8

9 ii. Return the approved invoice to Accounts Payable for payment as per Procedure 9.2. PART 3. METHODS OF PAYMENT 10. University standard practices Unless other arrangements are negotiated in advance with a supplier and approved by the Associate Director, Strategic Procurement, or Manager, Financial Operations, the University s practice, implemented by Accounts Payable staff, is to: i. apply standard payment terms of 30 days net, i.e. make payments at the end of the month following the month that the invoice is dated (and after the invoice has been ii. processed); make domestic payments, i.e. payments to vendors within Australia, in Australian dollars by EFT; cheques will only be issued in exceptional circumstances, and as per Procedure 10.2; iii. make international payments, i.e. foreign currency payments or payments made to a destination outside Australia, by IMT; bank drafts will only be issued in exceptional circumstances; iv. process domestic payments (i.e., to vendors in Australia) once a week and international payments (i.e., to vendors outside Australia) fortnightly on a Thursday or, where this is not a business day, the preceding business day (fully authorised and documented invoices need to be received by Accounts Payable the Friday before, for payment); v. send a remittance advice by to the vendor in respect of the payment. The University will not make payments by direct debit, on a single or recurring basis, or by BPAY. Exceptions to the above may only be applied at the discretion of, and with the approval of, the Manager, Financial Operations Urgent payments Urgent payments are at the discretion of the Manager, Financial Operations. As payments are made weekly, these will only be approved in exceptional circumstances. An administration fee for urgent payments will be charged to the requesting area Rejected payments Responsibility: Accounts Payable staff i. Where payments are rejected, or returned, investigate the issue and take steps to resolve it, contacting the vendor and updating their details (as per Procedure 7.2) if required. ii. If matter cannot be resolved, notify Nominated Purchasing Officer in relevant faculty/division, and work together to investigate and resolve Special arrangements for cheques Where payment by cheque is approved in advance by the Manager, Financial Operations: i. Cheques will not be made out to cash except in exceptional circumstances as approved by the Manager, Financial Operations. ii. Under no circumstances will cash cheques be mailed; they must be collected in person from Accounts Payable, and only on provision of proof of identity to the satisfaction of Accounts Payable staff; or by way of other arrangements approved by the Manager, Financial Operations Cancelling payments Payments by EFT or IMT cannot be cancelled once marked for payment by Accounts Payable staff. To cancel cheques: Step 1: or expenditure approval authority 9

10 If circumstances arise when a Nominated Purchasing Officer or expenditure approval authority believes a cheque should be cancelled: i. Notify the Manager, Financial Operations, of request to cancel, with reasons. Step 2: Responsibility: Manager, Financial Operations i. Consider and determine request to cancel. ii. If approved and payment not yet cleared, ensure necessary arrangements are made with bank to cancel payment. iii. Discuss and agree on follow-up action with relevant faculty/division decision-maker. iv. If appropriate, arrange for funds to be reallocated to the project code from which the payment was originally allocated. 11. Disposal Responsibility: All staff To dispose of University property after it is purchased, refer to the University Asset Management Procedures. PART 4. MONITORING AND REVIEW 12. Monitoring and review practices Vendor creation and bank account detail changes New vendor accounts are collated weekly by Financial Operations and reviewed by the Manager, Financial Operations Vendor removal The vendor list master file is cleansed by Financial Systems annually as part of the year end process. All vendors that have not been used in 15 months are made inactive. An inactive account can only be re-activated by approval of the Manager, Strategic Procurement, or Manager, Financial Operations Purchase order closure Purchase orders for which invoices have been paid are collated monthly and sent to faculty/division finance managers for review. Responsibility: Faculty/division finance managers Timeline: Monthly Review the list of purchase orders, and Financial Systems requesting System closure of those which have been finalised Un-presented cheques Un-presented cheques are reviewed annually by Financial Operations. Any cheque drawn by the University that has not been presented for payment after 15 months will be cancelled. 10