ORDERING OF GOODS AND SERVICES AND PAYMENT OF ACCOUNTS

Transcription

1 SECTION 10 ORDERING OF GOODS AND SERVICES AND PAYMENT OF ACCOUNTS TABLE OF CONTENTS Page Contacts for Section Introduction Orders for goods and services Ordering via the Internet Payment of accounts Payment of accounts via ITNET Accounts Payable Payment of Headteachers expenses Recording the transactions in the accounts Separation of duties 9 Appendix A Sample pro forma invoice 11 Appendix B Guidance notes on completion of A529 and A14 forms 13 Part IV: Guidance - Section 10 Page 1 RESO3526 Issue 2 : April 2002

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3 SECTION 10 ORDERING OF GOODS AND SERVICES AND PAYMENT OF ACCOUNTS CONTACTS General advice Lyn Stainton School Funding Unit Separation of duties issues Internal Audit Helpline Official order forms and County Supplies Department finance stationery ITNET Accounts Eileen Rice Payable ITNET Accounts Payable Authorised Signatory Margaret Dewell forms and Schools Listing ITNET Payroll Services Part IV: Guidance - Section 10 Page 3 RESO3526 Issue 3 : April 2003

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5 SECTION 10 ORDERING OF GOODS AND SERVICES AND PAYMENT OF ACCOUNTS 10.1 Introduction Once a school has made its purchasing decision and an order is placed, this commits it to expenditure against its approved budget. It is important, therefore, that all orders are properly authorised and that procedures ensure that the school only receives the goods and services which it has ordered, and that payment is made only for items that have been received. Part IV, Section 9 provides guidance on purchasing practice and strategies. The regulations to this Section are designed to provide internal controls within a school over orders which commit expenditure against the school's budget and the subsequent payment of invoices against those orders. The key to minimising the chance of error, omission and fraud is a sensible separation of duties among school staff over the ordering and payment process. The extent to which this is possible and reasonable will depend on the size of the school. Subsection 10.8 gives details of a model for separation of duties Orders for goods and services Key points to remember are: always use the school s pre-numbered official order forms resources must be available to meet expenditure order must be signed and authorised by a member of staff who has the delegated power to do so County Supplies orders must be coded, see below. Official serially numbered order forms (A223R) are available from County Supplies. Alternatively, schools may use order forms generated from their local accounting system. Access and distribution of order forms should be controlled, and should only involve staff with delegated powers. Further guidance about controlled finance stationery can be found in Part IV, Section 4 of this Handbook. When completing an official order form, whether it is an A223R or any other, there are a number of procedures that must be followed. Part IV: Guidance - Section 10 Page 5 RESO3526 Issue 3 : April 2003

6 a. Clearly mark the name and address of the supplier to whom the order is to be sent. b. Ensure that the completed order contains a delivery address for the goods, and an invoice address. If these are the same then it should be stated on the form. Both addresses should include contact names, to ensure that both the goods and the invoice reach the correct destination and can be dealt with quickly. c. Ensure that all goods required are itemised on the order form and that the quantity is correctly specified. Pay careful attention to suppliers' catalogues for the correct units of quantity. Rule off below the last item ordered to prevent subsequent alteration of the order. d. Complete the expenditure code section on the order form for your own information and to aid the budget monitoring process. e. For orders to County Supplies, the school's cost centre and account code must be entered on the A223R. See Appendix B to this Section for guidance on coding financial stationery. f. The order must be signed and authorised by a member of staff with delegated power to do so, ideally the budget holder. g. The top copy of the order is to be sent to the supplier and the duplicate copy retained within the order book. Orders should be used sequentially and duplicates must not be removed from the order book. h. Details of the delivery should be recorded on the order highlighting any discrepancies. i. If an order has been given over the telephone, a written order should be sent immediately (see Financial Regulations to Section 9, Purchasing Strategies, Leasing and Best Value). This order must be marked 'Confirmation Order' to ensure that delivery is not duplicated. j. When ordering from external suppliers remember to ask whether VAT and carriage have been included in the price. See Part IV, Section 12 Value Added Tax, for treatment of VAT on payment of the invoice. Some suppliers may offer discounts to the County Council so remember to check on this. To enhance budgetary control, it is wise to record the estimated cost of orders placed as committed expenditure against the appropriate budget allocation. This way they feature in any subsequent budget monitoring reports. On receipt of goods and services, schools will receive either a delivery note and subsequently an invoice or just an invoice. The school should check that the goods and services received Part IV: Guidance - Section 10 Page 6 RESO3526 Issue 2 : April 2002

7 are as ordered. Delivery notes and invoices should be cross-referenced to the copy order. Completed orders should be clearly designated as such, so that part complete or outstanding orders can be readily identified Ordering via the Internet With the rapid growth of the Internet and increased emphasis on electronic data interchange for schools, use of the Internet is becoming a feasible option for the purchasing of goods. Before embarking on purchasing goods on-line, the school should ensure that a policy is established clearly setting out appropriate use of the Internet for purchasing goods. The policy should be approved by the Governing Body and should include details of: members of staff with delegated authority to place orders via the Internet limitation for monetary value, volume and frequency of orders list of approved suppliers and credit limits procedure for placing orders, including documentation required, authorisation process and approved methods of payment. Wherever possible, schools should set up accounts with approved suppliers so that payment of goods can be made against invoices subsequently issued. This will safeguard the school against fraud and loss for non-delivery of goods, ensure that appropriate financial records are maintained and enable the school to recover VAT, where appropriate. If this is not possible, then, at the point of order, a pro forma invoice should be produced and authorised by the person with delegated authority. In this circumstance, VAT will not be recoverable since an official VAT invoice is not provided by the supplier. Where payment must be made at the point of order, then the school should ensure that they hold a National Westminster Business Card. Further details about business cards are published in Part IV, Section 6 to this Handbook. Schools should be careful to avoid the use of staff member credit cards, to safeguard against potential problems including liability, guarantees and issues over ownership of the goods Payment of accounts Key points to remember are: check the goods or services received against original orders match the order (and, where available, the delivery documentation for the goods or services) against the original invoice Part IV: Guidance - Section 10 Page 7 RESO3526 Issue 2 : April 2002

8 check that prices which include discounts, and all the arithmetic, are correct ensure that payment is sanctioned by the approved member of staff ensure that the cheque is made payable to the supplier shown on the invoice. Special care should be exercised where the school is asked to make the cheque payable to an alternate payee, to ensure that the payment is legitimate. The internal checks which should be carried out on invoices are important, to verify that the correct goods and services have been received and the sum due to the supplier is correct. Checks should be completed prior to the preparation of a cheque payment. Authorised cheque signatories should ensure such checks have been carried out before signing a payment. This can be achieved by a pre-printed slip or a stamp with the relevant internal checks listed on it. Payments should not be made against copy invoices or account statements. Similar internal checks should be carried out for all direct debit charges. Direct debit charges, for example, charges on the HCC monthly direct debit report, should be checked for accuracy and any discrepancies investigated. The person responsible for carrying out these duties should record any follow-up work required and sign the report to verify that the check has taken place Payment of accounts via ITNET Accounts Payable All invoices submitted to ITNET Accounts Payable for payment must be accompanied by an A529 coding slip and must also be listed on an A14 form. These forms document the school s approval and authorisation of invoices processed for payment. Guidance on completion of A529s and A14s and sample copies of these forms are provided on Appendix B to this Section. Schools must register the signatures of authorised members of staff that have delegated responsibility for the authorisation of payments on behalf of the school. ITNET carry out an annual review of authorised signatories. However, schools should ensure that any changes are notified to ITNET immediately to ensure that the authorised signatory listing is kept up to date. Further guidance and a copy of the form for notifying changes of authorised signatories are reproduced in Part IV, Section 13, Appendix D to this Section Payment of Headteachers expenses A member of the Governing Body must approve any reimbursement made to the Headteacher for expenditure on behalf of the school. Headteachers and Governors may face some practical Part IV: Guidance - Section 10 Page 8 RESO3526 Issue 2 : April 2002

9 difficulties in approving payments to Headteachers in accordance with Financial Regulations and While it is essential that the principle underlying these regulations is observed, arrangements can be made to do this, where necessary, through retrospective approval of payments, or the setting of a minimum value level below which explicit approval is not routinely required. Where the reimbursements are by cheque, we recommend that the cheques are countersigned by an authorised signatory (usually a senior member of staff) Recording the transactions in the accounts The payment of invoices or direct debit charges should be recorded in the accounts with the following detail: date of payment/charge amount including details of VAT, where appropriate cheque number/direct debit charge reference invoice reference description of payment/charge budget heading and account code. For there to be effective budget monitoring it is essential that payments/charges are matched against the relevant budget provision. Finance staff with responsibilities for recording transactions on the accounting system should have access to the detail of the budget plan Separation of duties The five key stages in the ordering and payment process are: i. placing and authorising the order ii. receipt of the goods or services and their confirmation iii. the verification of the invoice and certification for payment, and iv. the authorisation of payment, e.g. signing cheques v. recording the payment in the accounts. No one person should be able to complete all five stages. However, the extent to which a complete separation of duties can be achieved will depend on the size and organisation of the school, the benefits of separation will need to be balanced against the efficiency of the process. A suggested separation of duties is shown below, but it is for Governing Bodies to decide how best to implement this in their schools. Part IV: Guidance - Section 10 Page 9 RESO3526 Issue 2 : April 2002

10 Process Authorisation of orders (subject to limitations) Confirmation of receipt of goods and services Verification of invoice details and certification for payment Cheque authorisation Recording payment in the accounts Small primary Average primary or Secondary school school middle school Headteacher Headteacher Budget holders Secretary Secretary Budget holder or Bursar Secretary Secretary Bursar/Finance Officer Headteacher or other cheque signatories Headteacher or other cheque signatories Headteacher or other cheque signatories Secretary Secretary Bursar/Finance Officer Part IV: Guidance - Section 10 Page 10 RESO3526 Issue 2 : April 2002

11 APPENDIX A SECTION 10 SAMPLE PRO FORMA INVOICE PRO FORMA INVOICE/CHEQUE REQUISITION Cheque No: Date: Request from: Please raise payment by means of a cheque, made out as follows: Amount to be drawn: Account to be drawn from: General Fund/Petty Cash Date cheque required by: / / Purpose of cheque: Payee: Supporting documents with VAT registration number (where applicable) should be attached. Claimant s signature: Headteacher/authorised signatory: Date: / / Part IV: Guidance - Section 10 Page 11 RESO3526 Issue 2 : April 2002

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13 APPENDIX B SECTION 10 GUIDANCE NOTES ON COMPLETION OF A529 AND A14 FORMS Schools should use official finance forms to process invoices for payment via ITNET Accounts Payable. These forms are available from County Supplies. A529S (pink) Re-order no A529R (yellow) Re-order no A14 Re-order no This form provides coding instructions and approval for payment of the invoice for general expenditure. This form provides coding instructions and approval for payment of invoices for sub-contractors where Construction Industry Scheme regulations apply (see Part IV, Section 14 of this Handbook). This form provides the school s authorisation for the payment of invoices. Schools must register the signatures of authorised members of staff that have delegated responsibility for the authorisation of payments on behalf of the school. See Part IV, Section 13, Appendix D for information and guidance about the registration of authorised signatories. Completion instructions and sample copies of A529 and A14 forms are provided overleaf. Part IV: Guidance - Section 10 Page 13 RESO3526 Issue 2 : April 2002

14 Sample A529 Form and Completion Instructions HERTS C.C. Finance Dept. Use Only A529 S (01.93) Payment Checks Vendor/Pay 1. Order Number Number 2. Goods received/service performed 3. Prices Checked Chq 4. Discounts and Credits Checked Due Date attach 5. Calculations Checked 6. Copy order marked off 7. Reconciliation checks (where appropriate) P.C.K. Confirmed that above checks have been completed and Terms Internal Invoice invoice/claim is properly payable Code Ref HCC Approving Officer Remit Message VAT Category Standard Rate (Leave Blank) VAT only V Exempt Zero Outside Scope Future Use E Z O ACCOUNTING CONTROL KEY (ACK) COST CENTRE ACCOUNT SUBLEDGER P/F NETT AMOUNT p CR VAT COMM. REF Re-Order on County Supplies Code NETT TOTAL Completion of A529 Forms This form provides coding instructions and approves the payment of invoices to be processed via ITNET Accounts Payable. A separate invoice must be completed for each invoice to be processed. Coding instructions for cost centre and account code are required. A sub-ledger code may be required for invoices in relation to capital expenditure (please refer to Part IV, Section 8 for further guidance). Cost centre This is a seven-character, alpha/numeric code. The first four characters indicate the school type, and are followed by the three digit school number. Part IV: Guidance - Section 10 Page 14 RESO3526 Issue 2 : April 2002

15 School type E010 Nursery E320 Primary, Infant and First E330 Middle and Secondary E050 Education Support Centres E070 Special School number Must be shown as three digits. For example, School number 1 will be shown as 001. Therefore, the cost centre code for school number 1 is E Account code Sub Ledger P/F Net Amount CR VAT Comm. Ref Net Total This is specific to the type of expenditure. An appropriate code must be selected from the account code list published and distributed with the monthly Central Payments, Earmarked Funds and Traded Services Report Only required for capital expenditure Leave blank Enter amount of the invoice (or credit note) exclusive of VAT Enter CR if a credit note is attached Enter appropriate code: Standard Rated - Leave blank Exempt - E Zero - Z Outside Scope - 0 Leave blank Total of all amounts listed on A529 Once the coding instructions have been completed, all blank lines should be ruled through. Any alterations must be initialled and the form should then be approved for payment by a staff member with delegated responsibility. All invoices approved for payment must then be listed on an A14 to authorise the payment. Part IV: Guidance - Section 10 Page 15 RESO3526 Issue 2 : April 2002

16 Sample A14 Form and Completion Instructions COUNTY SUPPLIES RE-ORDER CODE A14 (02.00) HCC CREDITORS SYSTEM INVOICE GROSS AMOUNT INCLUDING VAT E 5821 p p Department/School/Area School Number Authorised for payment in accordance with guidelines for the payment of creditor invoices Cancel all unused lines Sign all alterations SEND TOP TWO COPIES TO ITNET MANAGED SERVICES COUNTY HALL Authorised Officer PRINT NAME (Authorised Officer) Date A14 (02.00) Part IV: Guidance - Section 10 Page 16 RESO3526 Issue 2 : April 2002

17 Completion of A14 Form This form provides the school s authorisation for invoices to be processed via ITNET Accounts Payable. List all invoices that have been approved for payment using an A529 coding slip. Enter the name of the payee and the full amount of the invoice (including VAT). Total the invoices listed on the A14. Any alterations must be initialled and a line must be drawn through all unused lines. The A14 must then be authorised by a member of staff with delegated responsibility for this and whose signature has been registered with ITNET Accounts Payable. See Part IV, Section 1 for further information about delegation of responsibilities and the requirements of a Schedule of Delegation, and Part IV, Section 13 for information about registering authorised signatories with ITNET. The two top copies of the A14 together with the A529 coding slips and original invoices should be sent to ITNET Accounts Payable. Photocopies of the invoices should be retained together with the school s copies of the A14. Part IV: Guidance - Section 10 Page 17 RESO3526 Issue 2 : April 2002