Slide 1December 2015 Confirming Orders (After-the-fact orders)

Slide 1December 2015

Confirming Orders(After-the-fact orders)


Definition of a Confirming Order

A purchase, letter of intent to purchase, or request for scheduling in advance of an order that is made by an individual, without having a valid purchase order number, P-Card or approved payment request form established to pay for that purchase or service.


University and Procurement Policies

Use of confirming Requisitions and Purchase Orders without an approved University payment method to authorize retroactively commitments to suppliers by personnel is a violation of University policy.


Delegation of Procurement

The President, through the Vice President for Finance and Administration, has delegated the procurement function to the Procurement Services Director/Chief Procurement Officer. Any acquisition of a commodity or a service made before Procurement Services issues a PO may become the personal obligation of the individual obtaining the commodity or service.


The requirements stated herein apply to all purchases of commodities and contractual services regardless of the funding source. It is the responsibility of Procurement Services to determine the price and secure the source of supply (supplier) for the purchase. Requisitioning departments shall never assume that their recommended supplier will be the supplier/contractor to whom the PO will be issued.Requisitioning departments are urged to contact Procurement Services prior to preparing a requisition to secure information about specifications, sources of supply, terms and prices.A supplier should never be allowed to provide a service or deliver a commodity before a PO is issued.



Even when legal authority exists via a power of attorney, all contracts and agreements require review and approval by Procurement Services prior to the signing of the contract document, a requisition must be submitted and a PO issued before any contract documents are released to the supplier. If this policy is not followed, the individual signing the contract may be personally liable for any costs incurred.



Audit for Fiscal Year 2005-06

An audit for FSU for fiscal year 2005-06 by the State of Florida, Office of the Auditor General recommended:

“The University should ensure that University personnel do not enter into written contracts that exceed their authorized limits, and that contracts are reviewed first by Procurement Services, and then if necessary, Procurement Services will obtain approval by the Office of the General Counsel prior to executing written contracts, as required by University policy.”


Prohibited Procurement Practices

Placing orders for goods or services directly with suppliers or instructing the supplier to invoice FSU before Procurement Services has issued a PO to that supplier.Using a personal credit card or personal funds to purchase goods or services for the department, with the expectation of being reimbursed by FSU, unless the amount is less than $25.00.


Any individual who engages in a prohibited procurement practice is hereby notified that he or she is risking their personal funds only, and not the funds of FSU. This policy applies to all funds on deposit with FSU, regardless of the source. Lack of knowledge of proper procedures, or a perceived lack of time to follow them, when circumstances do not indicate that a true emergency existed, will result in the return of all payment requests, expense reimbursements or requisitions for handling by the individual making the charge, or the individual approving it after the fact within the department.

Prohibited Procurement Practices


Applies to:

• Requisitions • Expense Reimbursements (especially over $25)• Payment Request Forms for unencumbered

payments


Expense Reimbursements

• Anything over $25.00 requires a justification• Employee must be considered in Travel Status

Acceptable Reimbursements: (i.e. at a conference and you need to purchase a book but they don’t take P-Card or out in the field performing research at a more remote location and you need to purchase something for that research but supplier doesn’t take p-card and no access to the OMNI system)


Sales Tax: The University is sales tax exempt for PO or P-Card. When making a personal purchase and you are charged sales tax, if approved, the University reimburses you back the full cost of the purchase including the sales tax but the University never recoups sales tax.

This costs the University a lot of money over time.

Expense Reimbursements


Payment Request Forms

Goods and Services should all come through Procurement Services. There is an allowable Unencumbered Disbursements list for certain things that can be purchased using a Payment Request Form (PRF). For a complete listing, contact Accounts Payable. Items being paid via a PRF should not be after the fact. The University would send a check to the supplier and then merchandise is shipped, not the other way around.PRF’s can be used when a supplier doesn’t take POs or P-Card. The University should consider using other suppliers that do accept POs or P-Cards before using PRFs for ordering items.

http://procurement.fsu.edu/how/pay/unencumbered-payments


Examples of Confirming Orders

• Catering at the University Center Club *unaware of the cost of the catered services or service charges.• Blanket orders not issued as services are required and then

submitted several months later when invoices received.• Printing or design work submitted after the work was completed.• Charter buses secured 2 days prior to departure or after trip.• Clothing (i.e. uniforms, shirts, etc.) embroidered/purchased.• Computer or A/V supplies ordered and delivered with no PO.


Adverse Effects of Confirming Orders• Supplier assumes risk by providing goods or services.• FSU employee assumes risk by requesting

goods/services without having an established payment method.

• Insufficient funds• Budget closed or grant ended or grant may not allow the

purchase• Overpayment for goods/services• Potential Liability• EH&S Issues• Construction/Facilities Issues• Property Tag / Asset Management Issues


• Lack of Administrative Approvals• By-passing State Law for procurement methods• By-passing Legal Review• Taxation Issues – Conflict of Interest (Employee Employer relationship)• Interest penalties / University Credit rating• Supplier Diversity Initiative• Lack of Internal University Approvals• Risk of Audit write-up• If it continues, and University continues to support it, we would be

granting inherent authority to continue the practice

Adverse Effects of Confirming Orders


Bypasses Internal University Approvals

• Computing Equipment (over $20,000)• Security Systems and Fire Alarms• Renovations• Copiers• Printing and Copying• Telephones and Telephone Equipment• Radiological Material• Uniforms or clothing for employees• Legal Services• Signs, exterior (permanent)• Controlled Substances• Fans, Heaters, air circulators, etc.• Hazardous Waste• Traffic control & Personal Safety Devices / Law enforcement• Contract and Grant Requisitions


Acceptable Procurement Methods

• FSU Visa Purchasing Card (“the P-Card”) if allowable by the P-Card program. Newly revised policies and procedures have expanded the flexibility of the P-Card, so that its use can be more closely tailored to the needs of the department.

• Submission of a requisition to Procurement Services via OMNI.

• Payment Request Form if allowable per the allowable Unencumbered Disbursements list.

http://procurement.fsu.edu/how/pay/unencumbered-payments


Emergencies

If you have a bona-fide emergency and the University is closed or you’re in travel status and do not have a P-Card or supplier doesn’t accept P-Card, document the nature of the emergency and turn in your paperwork by the next business day to Procurement Services for review. If it’s a true emergency then Procurement Services will approve the request.


Confirming Order Log

Procurement Services keeps a confirming order log which is reviewed by the Provost, and the VPFA.

We check for reoccurrences from the same department, same individual and same supplier.

Suppliers are sent a letter putting them on notice that if it happens again, they will not be paid and they must obtain a University payment method (i.e. valid PO, P-card or University check) prior to providing services or goods.


How to Prevent Confirming Orders?

• Plan Ahead• Contact Procurement Services for help or expediting orders,

obtaining price quotes, bidding, or contract information.• Know or read the University Procurement policies and procedures.• Use a P-Card for allowable P-Card purchases when you can.• Enter a requisition in a timely manner to allow Procurement

Services time to obtain competitive pricing, verify supplier information, obtain missing requisition information, etc.

• Lack of knowledge or saying someone was new is not sufficient for approval of confirming orders.


When watching for the PO number in OMNI, make sure that the PO is in “Dispatched” status before providing the PO number to the supplier. Dispatched status means that the purchase order has passed budget checking and has been sent to the supplier. If not in dispatched status the PO has not finished processing and it could be in budget error.



Remember, it takes more time to do it the wrong way than the right way. If in doubt or you’re not sure the correct way to handle something, please contact Procurement Services.




Procurement Services Main Phone Number: 644-6850Website: www.procurement.fsu.edu

To apply for a P-Card contact Nancy Milburn at 644-9725 or [email protected] P-Card web page: www.procurement.fsu.edu/how/buy/p-card

Confirming Orders: Contact Karen Gibson at 644-9729 or [email protected] Confirming Order Justification Form and Reimbursement Justification

Form (routes to AP for approval): www.procurement.fsu.edu/forms

On-site training can be made available to discuss compliance and procedures by contacting Nancy Milburn in Procurement Services at 644-6850.

http://www.procurement.fsu.edu/

mailto:[email protected]


http://www.procurement.fsu.edu/how/buy/p-card



http://www.procurement.fsu.edu/forms


QUESTIONS?

Documents

Slide 1December 2015 Confirming Orders (After-the-fact orders)