Policy & Procedure Manual Finance Expenditure Approvals

Transcription

1 The Scarborough Hospital Policy & Procedure Manual Finance Expenditure Approvals Policy Four policies, including this policy, govern the selection, purchase and payment process for operating and capital funded goods and services: 1. Policy Number Purchasing BPS Based Purchasing 2. Policy Number Finance Expenditure Approval 3. Policy Number Corporate Administration Reimbursement of Travel, Meal, Hospitality and Other Hospital-Related Expenses 4. Policy Number Finance Capital Budgeting, Planning and Expenditures In addition, the BPS Based Purchasing Procedure Manual provides further information about the Broader Public Sector (BPS) Procurement Directive. The overall framework for documentation of expenditures is the: Operating Plan, approved annually by the Board, and the Capital Plan, approved every two years by the Board. Any expenditure not part of the approved Operating or Capital Plan that exceeds $250,000 will require the approval of the Board. This Expenditure Approval Policy details the appropriate signing approval limits for all commitments to incur expenditures on behalf of the Hospital. There are three types of expenditures: 1) Purchase Requisition expenditures, either using a a. paper form or b. electronic requisition (ereq) 2) Direct Payments and 3) Expense Reimbursements. Page 1 of 12

2 Procedure 1. Purchase Requisition A Purchase Requisition form is used by Purchasing to generate a Purchase Order and an associated Purchase Order number. A Purchase Requisition must be completed for most proposed expenditures as outlined in the table below including consulting services. Payments of expenditures or commitments that do not need Purchase Requisitions are considered to be Direct Payments as described in Section 2. A list of Direct Payments is provided in Appendix 1. Requisition Type Electronic Paper Office Supplies Printing Furniture Information and Communication technology, systems and software Emergency Purchases Use of Requisition Type Electronic requisitions (ereqs) in SAP are used to request the following purchases: all operating budget funded goods non-consulting services facility purchase requirements loaned equipment consignment equipment and materials returns and repairs of products Paper Purchase Requisitions are used to purchase: capital funded (Capital Plan) items service and/or lease agreements/contracts where additional documentation is required consulting services and Single/Sole Sourced goods or services Purchased via web base process from Grand and Toy In-house via paper printing requisition. If the TSH print shop determines that the job requires outside resources to complete at a cost, a paper Purchase Requisition will be required/ All Purchase Requisitions for furniture requires the approval of the Director of Capital Planning and Project Management Office. Invoices presented for payment that are in violation of this section will require the signature of the appropriate Vice President All Purchase Requisitions for information and communication technology, systems and software require the approval of the Director of Information Services & Telecommunications. Invoices presented for payment that are in violation of this section will require the signature of the appropriate Vice President All requests must be routed to Purchasing via the above scenarios All non-direct Payment expenditures require an ereq / Purchase Requisition form Page 2 of 12

3 a) Approval levels for Consulting Services (operating or capital funded): Consulting Service (operating or capital funded) Purchase Requisition Form NOTES: indicates no expenditure approval authority for authority level and purchase type if less than $500,000 VP AND CEO ($250,000 if $500,000 CEO AND Board ($250,000 Required Signature / Approval: Manager Director, Logistics, Procurement & Management OR Manager, Purchasing review and initial all contracts / agreements Director Vice-President AND President & CEO $0 to $250,000 $0 to $500,000 $0 to $500,000 President & CEO AND Chair, Board OR Vice Chair, Board OR delegated Board member in absence of Chair/ Vice Chair $250,000 $500,000 $500,000 A competitive procurement process (invitational or open) should be used for consulting services. In rare circumstances where an unforeseeable situation of urgency exists, the CEO must approve the non-competitive procurement of consulting services less than $250,000 and the CEO and Board must approve all non-competitive procurements $250,000. Purchase Requisition forms (not ereqs) are used to purchase consulting services. Two signatures are required on the form and the for the services. If the expenditure is less than $500,000 a Vice-President and the CEO must sign and if the expenditure is $500,000, the CEO and the Board must sign. If additional scope is added to a contract or agreement with a resulting increase in cost above the original Purchase Requisition amount, a new Purchase Requisition and agreement/contract amendment must be prepared. The required signature/approval authority is for the cumulative amount (i.e. original scope plus additional scope). Page 3 of 12

4 b) Approval levels for Capital Budget funded Goods & Other Services: Capital Funded Goods & Other Services (individual items costing $10,000) Purchase Requisition Form NOTES: indicates no expenditure approval authority for authority level and purchase type if less than $100,000 Director AND VP ($50,000 if $100,000 to $500,000 VP AND VP/CFO ($50,000 to $250,000 if $500,000 VP/CFO AND CEO ($250,000 Required Signature / Approval: Manager Director, Logistics, Procurement & Management OR Manager, Purchasing review and initial all contracts / agreements Director AND Vice-President $10,000 to $50,000 $10,000 to $100,000 Vice-President AND Vice-President & CFO (VP/CFO) $50,000 to $250,000 $100,000 to $500,000 $0 to $500,000 Vice-President & CFO (VP/CFO) AND President & CEO $250,000 $500,000 $500,000 Chair, Board OR Vice Chair, Board OR delegated Board member in absence of Chair/ Vice Chair capital expenses in excess of available capital contingency allowance capital expenses in excess of available capital contingency allowance capital expenses in excess of available capital contingency allowance As per Policy Number Finance Capital Budgeting, Planning and Expenditures, the Board approves the Capital Plan, which itemizes approved expenditures $10,000 for equipment, information systems projects, facility renovation and new construction projects, and contingency funds. Patient consumable items (e.g. implants, contrast media) costing more than $10,000 are funded from the operating budget. With limited exceptions, individual items costing $10,000 or less are funded from the operating budget. Unbudgeted individual items costing more than $10,000 must be paid for from capital contingency funds and approval is required from the Senior Management Team (see Policy Number ). Page 4 of 12

5 Managers and Directors shall work with Purchasing to acquire goods and non-consulting services documented in the Capital Plan and items funded from contingency capital funds (see Policy Number ). In certain circumstances a non-competitive procurement process (also known as a single-source situation) may be conducted. These situations are documented in the BPS Based Purchasing Procedure Manual. When this is the case, a Single/Sole Source Certification form must be filled out, properly approved and accompany a Paper Purchase Requisition. Purchase Requisitions forms (not ereqs) are used to purchase capital items. The Capital Reference number assigned to the item or project in the Capital Plan must be included on the Purchase Requisition. If additional scope is added to a contract or agreement with a resulting increase in cost above the original Purchase Requisition amount, a new Purchase Requisition and agreement/contract amendment must be prepared. The required signature/approval authority is for the cumulative amount (i.e. original scope plus additional scope). c) Approval levels for Operating Budget funded Goods & Other Services: Operating Funded Goods & Other Services Electronic Requisition (ereq) NOTES: indicates no expenditure approval authority for authority level and purchase type One signature required: if less than $10,000 AND not single/sole source if less than $100,000 Manager AND Director ($50,000 single/sole source) if $100,000 to $500,000 Director AND VP ($50,000 to $250,000 if $500,000 to $2,500,000 VP AND CEO ($250,000 to $1,000,000 if $2,500,000 CEO AND Board ($1,000,000 Required Signature / Approval: Unit Clerks, Administrative Assistants and defined other positions Diagnostic Imaging Charge Technologists, Surgery OR Inventory Clerk and defined other $0 to $1,000 $0 to $10,000 Manager $0 to $10,000 Page 5 of 12

6 Operating Funded Goods & Other Services Electronic Requisition (ereq) Director, Logistics, Procurement & Management OR Manager, Purchasing review and initial all contracts / agreements Manager AND Director If there is not a department Manager, another Director or VP may sign with the Director $0 to $50,000 $10,000 to $100,000 Director AND Vice-President $50,000 to $250,000 $100,000 to $500,000 $0 to $500,000 (life of agreement) Vice-President AND President & CEO $250,000 to $1,000,000 $500,000 to $2,500,000 $500,000 to $2.500,000 (life of agreement) President & CEO AND Chair, Board OR Vice Chair, Board OR delegated Board member in absence of Chair/ Vice Chair $1,000,000 $2,500,000 $2,500,000 (life of agreement) With limited exceptions, individual items costing $10,000 or less are funded from the operating budget. Patient consumable items (e.g. implants, contrast media) costing more than $10,000 are funded from the operating budget. Unbudgeted individual items costing more than $10,000 must be paid for from capital contingency funds and approval is required from the Senior Management Team (see Policy Number Finance Capital Budgeting, Planning and Expenditures). Electronic requisitions are used to acquire operating funded goods and non-consulting services. In certain circumstances a non-competitive procurement process (also known as a single-source situation) may be conducted to acquire these goods or services. These situations are documented in the BPS Based Purchasing Procedure Manual. When this is the case, a Single/Sole Source Certification form must be filled out, appropriately approved and accompany the paper purchase requisition. If additional scope is added to a contract or agreement with a resulting increase in cost above the original Purchase Requisition amount, a new Purchase Requisition and agreement/contract amendment must be prepared. The required signature/approval authority is for the cumulative amount (i.e. original scope plus additional scope). Page 6 of 12

7 2. Direct Payments To the greatest extent possible, all purchases should be initiated using a Purchase Requisition. Direct Payment expenditures do not require a Purchase Requisition. A list of authorized Direct Payment expenditures is in Appendix 2. Additions to Appendix 2 require the authorization of the Vice President Corporate Services & CFO. For these expenditures, an appropriately authorized invoice or other financial documentation of the expenditure must be provided to Accounts Payable. The approval levels for Direct Payments are as follows: NOTES: indicates no expenditure approval authority for authority level and purchase type Direct Payment Invoice or Other if less than $100,000 Manager AND Director if $100,000 to $500,000 Director AND VP if $500,000 VP AND CEO Required Signature / Approval: Manager AND Director If there is not a department Manager, another Director or VP may sign with the Director Director AND Vice-President Vice-President & AND President & CEO $0 to $100,000 $100,000 to $500,000 $500,000 Page 7 of 12

8 3. Employee Expense Reimbursement See Policy Number Corporate Administration Reimbursement of Travel, Meal, Hospitality and Other Hospital-Related Expenses. Expense Reimbursement Employee Expense Report / Petty Cash Claim Purchase Requisitions / ereq must be used for all amounts $5,000. Employee Position Required Signature / Approval: Expense Claim Amount Staff (all positions below Manager level) Manager $0 to $5,000 Manager Director $0 to $5,000 Director Vice-President $0 to $5,000 Vice-President CEO $0 to $5,000 CEO Chair, Board OR Vice Chair, Board of Directors OR delegated Board member in absence of Chair/ Vice Chair $0 to $5, Invoices a) All invoices, with the exception of Direct Payments, should have a Purchase Order (PO) number. Non Direct Payment invoices sent to Accounts Payable that do not have PO number are in violation of this policy and will be forwarded to Purchasing for follow-up and investigation. b) Invoices for services, with the exception of Direct Payments, are matched with a Purchase Order. Unlike goods, services cannot be received through the procurement (SAP) system. Therefore, all service invoices require the signature of the program/department manager if the invoice is less than $10,000 or the Director if the invoice is over $10,000. The signature is required to confirm the service has been completed prior to payment. 5. Payroll Remittances The processing of payroll has appropriate and effective controls to ensure that payroll and withholding amounts are accurate and valid. Management authorizes the hours of work for employees prior to payment processing. The calculation of statutory payroll deductions are determined by the authorized hours and automated based on tables that are updated when Page 8 of 12

9 government regulations change. Regular audits and reconciliations are performed to ensure accuracy of the payroll and related deductions. For payroll and withholding amounts, an invoice or other financial documentation (e.g. payroll register) can be paid with the approval of the Manager of Payroll and Director of Financial Services regardless of the remittance amount. The following items are related to statutory payroll deductions or required by Hospital policy. Payroll Remittances HOOPP Statutory employment payments Employer Health Tax (EHT) Health, Dental and Disability Benefits Reference and Examples CPP, WSIB, EI, Income Tax Sunlife, Desjardins, 6. Cheques NOTES: indicates no expenditure approval authority for authority level and purchase type All Cheque Electronic signature used for cheques less than $100,000 if $100,000 to $2,500,000 VPAND VP/CFO OR CEO if $2,500,000 VP/CFO AND CEO Required Signature / Approval: Vice President AND Vice-President & CFO OR President & CEO Vice-President & CFO AND President & CEO $100,000 to $2,500,000 $2,500, Signing Officers and Delegation of Authority The Board and Governance Signing Officers Policy (See Policy Number 1.20.D.12 Signing Officers) defines which individuals can sign contracts, negotiable instruments and other legally binding documents of the Hospital. In the event of an absence of the President & CEO or the Vice President & CFO, a Vice- President may be appointed during the absence period as a signatory for the President & CEO or the Vice President & CFO. Page 9 of 12

10 8. Violations of Policy Any invoice that is presented for payment that does not have a Purchase Order, is not listed in Appendix 1 as a Direct Payment Expenditure and is not covered under Section 6 Payroll Remittances are violations of this policy and require the approval of the appropriate Vice President prior to payment. Page 10 of 12

11 Expenditure Approvals by Document Type NOTES: indicates no expenditure approval authority for authority level and purchase type Required Signature / Approval: Unit Clerks, Administrative Assistants and defined other Diagnostic Imaging Charge Technologists, Surgery OR Inventory Clerk and defined other 1. a) Purchase - Capital or Operating Funded Consulting Service Purchase Requisition Form if less than VP AND CEO if CEO AND Board Single/Sole has lower amounts 1. b) Purchase - Capital Funded Goods & Other Services Purchase Requisition Form Individual goods costing $10,000 if less than $100,000 Director AND VP if $100,000 to $500,000 VP AND VP/CFO if $500,000 VP/CFO ANDCEO Single/Sole has lower amounts 1. b) Purchase - Operating Funded Goods & Other Services Electronic Requisition (ereq) One signature required: if less than $10,000 AND not single/sole source if less than $100,000 Manager AND Director if $100,000 to $500,000 Director AND VP if $500,000 to $2,500,000 VP AND CEO if $2,500,000 CEO AND Board Single/Sole has lower amounts 2. Direct Payment Invoice Two signatures required: if less than $100,000 Manager AND Director if $100,000 to $500,000 Director AND VP if $500,000 VP AND CEO 3. Employee Expense Report / Petty Cash Claim Employee Position Expense Claim Amount Purchase Requisitions / ereq must be used for all amounts $5,000. Policy Number Corporate Administration - Reimbursement of Travel, Meal and Hospitality and Other Hospital-Related Expenses All 6. Cheques Cheques less than $100K signed electronically Two signatures required: if $100,000 to $2,500,000 VP AND VP/CFO OR CEO if $2,500,000 VP/CFO AND CEO $0 to $1K $0 to $10K Manager $0 to $10K $0 to $10K Director, Logistics, Procurement & Management OR Manager, Purchasing review and initial all contracts / agreements Director $10K to $50K Vice-President $0 to $250K $0 to $0 to Vice-President & CFO (VP/CFO) CEO Chair, Board OR Vice Chair, Board of Directors OR delegated Board member in absence of Chair/ Vice Chair $0 to $250K $0 to $0 to $250K $250K $50K to $250K $50K $250K capital expenses in excess of available capital contingency allowance $10K to $100K $100K to $100K capital expenses in excess of available capital contingency allowance review and initial all contracts / agreements $0 to $50K $0K to $100K capital expenses in excess of available capital contingency allowance $50K to $250K $50K to $250K $250K to $1,000K $1,000K $10K to $100K $100K to $100K to to $2,500K $2,500K review and initial all contracts / agreements all positions below Manager level $0 to $5,000 $10K to $100K Manager $0 to $5,000 $0K to (life of agreement) $0K to (life of agreement) to $2,500K (life of agreement) $2,500K (life of agreement) $100K to Director $0 to $5,000 $100K to $2,500K $100K to Director $0 to $5,000 Vice- President $0 to $5,000 $100K to greater than $2,500K $100K to greater than $2,500K CEO $0 to $5,000

12 APPENDI 1 LIST OF DIRECT PAYMENT EPENDITURES Direct Payment Types Hospital Liability Insurance Inter Hospital Payments University Payments Physicians Payments Loan Payments Employee Expense Reimbursements Union/Employee Associations Courts Utilities Telecommunications Collections Memberships, Conferences, Subscriptions, Registrations, Newspapers Rent Taxi Linen Services Office Supplies Patient Refunds Plexxus Certification Catering Lawyer Canada Post Recruitment Postings and Advertising Courier Costs Settlements Human Resources related requests Honorariums Deposits Reference and Examples HIROC An Employee Expense Report Form is used to reimburse employees for employee paid business expenses. See Policy Number Corporate Administration Reimbursement of Travel, Meal and Hospitality and Other Hospital-Related Expenses Excludes the purchase and or lease of equipment such as telephone systems or cell phones Booth Centennial Grand and Toy CPR Workopolis Arbitration and grievance awards Massages, Long Term Service Award costs Banquet halls, rooms, rentals