Expenditure Policy. Purpose of Policy

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1 Purpose of Policy Overview Scope: Mandatory Policy Guidance on the financial controls around procurement and tendering for goods and/or services, including the purchasing and receipting of goods and/or services. An overview on the process to be undertaken when acquiring goods and/or services on behalf of the University. All staff who have authority to purchase and/or approve the purchasing of goods and/or services, including receipting the goods and payment of invoices. Contact Officer Name: Role: Jess Wright Financial Accountant 1

2 Segregation of Duties Segregation of duties is an internal control designed to prevent error and fraud by ensuring that more than one person is required to complete a task. It serves as a deterrent to fraud and concealment of error because of the need to recruit another individual's co-operation, via collusion, to conceal it. There must be a segregation of duties in place where staff make a financial commitment on behalf of the University. In particular: There must be segregation of duties between the ordering and invoice approval functions; All orders raised must be approved by the relevant budget holder; Authorisation limits must be adhered to. Delegation of Authority The University has a hierarchical structure which can be found within the Delegated Authority Schedule which governs budgetary authority across the University. df Procurement and Tendering Value for Money is the over-riding principle on procurement and tendering. The University requires all budget holders to obtain supplies, equipment and services at the most economically advantageous cost, consistent with quality, delivery requirements, sustainability and always in accordance with sound business practice. Refer to for procurement and tendering policies and procedures. Purchase Orders The ordering of goods and services should be in accordance with the University's Delegated Authority Schedule and Procurement s policies. Purchase orders must be raised using the University's systems (efinancials, PECOS, Sciquest) for all purchases of goods and services before the purchase is made. Exemption to this will apply to a small number of cases, for example where pre-arranged contracts exist and it is impractical to raise a purchase order (e.g. energy contracts). Purchase Orders fulfil the role of acceptance of a supplier's offer and bind a contract on the University's terms and conditions. The use of purchase orders provides protection for the individual buyers and the University. Where goods are purchased from overseas, the Finance Department s VAT and Tax team should be contacted so that the duty and VAT implications can be correctly applied. 2

3 Goods Receipt All goods should be received at designated receipt and distribution points. On receipt they should be checked for quantity and/or weight and inspected for quality and specification. A delivery note should be obtained from the supplier at the time of delivery and signed by the person receiving the goods. All goods received which are of the requisite standard should be entered onto the University's financial system via a GRN (goods received note) on the day of receipt. If the goods are deemed to be unsatisfactory, then the supplier should be immediately notified, preferably in writing, so that they can be collected for return as soon as possible. Where goods are short on delivery, the record should be marked accordingly and the supplier immediately notified. Where practical, all persons receiving goods on behalf of the University must be independent of those who negotiated prices and terms and placed the official order. Payment of Invoices The Director of Finance is responsible for deciding the most appropriate method of payment for categories of invoice. Payment of all supplier invoices is made by the Finance Department. Payment to suppliers must be made by BACS electronic transfer. Where this is not possible a cheque will be raised. Supplier invoices will be processed after a series of checks, as follows: The invoice contains a valid purchase order reference from the University's finance system (with the exception of a small number of spend categories where pre-arranged contracts exist and it is impractical to raise a purchase order); The amount invoiced is within the University's tolerance level when compared to the purchase order; The quantity invoiced is in line with the purchase order; A GRN (goods received note) has been raised on the University's financial system. Any invoice which does not comply with the checks as above will be returned to the supplier and relevant University requester, who will be expected to resolve the situation. Late Payment The Late Payment of Debts (Interest) Act 1998 was introduced to give small businesses the right to charge interest on late payments from large organisations and public authorities. Key points are: Small businesses can charge interest on overdue invoices; The rate of interest is 8% per annum above the official daily rate of the Bank of England; The Act applies to overseas organisations; The University can be sued for non-payment. 3

4 In view of the penalties in this Act, University Court requires that invoices must be passed for payment as soon as they are received. Any charges incurred will be charged back to the College/University Service concerned. Land and Building Expenditure The Estates website gives a detail overview of development project procedures for capital expenditure. Section 3 of the Delegated Authority Schedule details approval limits. Cheque and BACS payments Bank details held on the accounts payable systems will only be amended on the written instruction of the student/member of staff or supplier. This is done by ing accounts.payable@ed.ac.uk with headed supplier notepaper or a UoE staff or Student account. If a supplier/member of staff or student has elected to be paid via BACS AP will only amend this on receipt of written instructions. 25 April

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