Confirming OrdersConfirming Orders

(After-the-fact orders)(After-the-fact orders)

Definition of a Confirming Definition of a Confirming OrderOrder

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

University and Purchasing University and Purchasing PoliciesPolicies

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

Delegation of Procurement Delegation of Procurement

The President, through the Senior Vice The President, through the Senior Vice President for Finance and President for Finance and Administration, has delegated the Administration, has delegated the procurement function to the Director of procurement function to the Director of Purchasing. Any acquisition of a Purchasing. Any acquisition of a commodity or a service made before commodity or a service made before the Purchasing Department issues a the Purchasing Department issues a purchase order may become the purchase order may become the personal obligation of the individual personal obligation of the individual obtaining the commodity or service.obtaining the commodity or service.

Delegation of ProcurementDelegation of ProcurementThe requirements stated herein apply to all purchases of The requirements stated herein apply to all purchases of

commodities and contractual services regardless of the commodities and contractual services regardless of the funding source. funding source.

It is the responsibility of the Purchasing Department to determine It is the responsibility of the Purchasing Department to determine the price and secure the source of supply (vendor) for the the price and secure the source of supply (vendor) for the purchase. Requisitioning departments shall never assume that purchase. Requisitioning departments shall never assume that their recommended vendor will be the vendor/contractor to their recommended vendor will be the vendor/contractor to whom the purchase order will be issued.whom the purchase order will be issued.

Requisitioning departments are urged to contact the Purchasing Requisitioning departments are urged to contact the Purchasing Department prior to preparing a requisition to secure Department prior to preparing a requisition to secure information about specifications, sources of supply, terms and information about specifications, sources of supply, terms and prices.prices.

A contractor should never be allowed to provide a service or A contractor should never be allowed to provide a service or deliver a commodity before a requisition is prepared and a deliver a commodity before a requisition is prepared and a purchase order issued.purchase order issued.

Delegation of ProcurementDelegation of Procurement

Even when legal authority exists via a power of Even when legal authority exists via a power of attorney, all contracts and agreements attorney, all contracts and agreements require review and approval by the require review and approval by the Purchasing Department prior to the signing of Purchasing Department prior to the signing of the contract document, and a Requisition the contract document, and a Requisition must be submitted, and a Purchase Order must be submitted, and a Purchase Order issued, before any contract documents are issued, before any contract documents are released to the contractor/vendor. If this released to the contractor/vendor. If this policy is not followed, the individual signing policy is not followed, the individual signing the contract may be personally liable for any the contract may be personally liable for any costs incurred.costs incurred.

Audit for Fiscal Year 2005-06Audit for Fiscal Year 2005-06 An audit for FSU for fiscal year 2005-06 by An audit for FSU for fiscal year 2005-06 by

the State of Florida, Office of the Auditor the State of Florida, Office of the Auditor General recommended:General recommended:

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

Unauthorized signing of Unauthorized signing of ContractsContracts

March 2006 memorandum by John March 2006 memorandum by John Carnaghi to all DDD’s advising Carnaghi to all DDD’s advising Faculty and Staff who purchase Faculty and Staff who purchase equipment, supplies or services equipment, supplies or services before obtaining FSU Purchasing before obtaining FSU Purchasing Department approval assume the Department approval assume the risk of personal liability for payment.risk of personal liability for payment.

Prohibited Purchasing Prohibited Purchasing PracticesPractices

Placing orders for goods or services Placing orders for goods or services directly with vendors, instructing the directly with vendors, instructing the vendor to invoice Florida State University vendor to invoice Florida State University before the Purchasing Department has before the Purchasing Department has issued a purchase order to that vendor.issued a purchase order to that vendor.

Using a personal credit card or personal Using a personal credit card or personal funds to purchase goods or services for funds to purchase goods or services for the department, with the expectation of the department, with the expectation of being reimbursed by FSU, unless the being reimbursed by FSU, unless the amount is less than $25.00.amount is less than $25.00.

Prohibited Purchasing Prohibited Purchasing PracticesPracticesIMPORTANTIMPORTANT

Please post this notice and advise all Please post this notice and advise all faculty and staff, including graduate faculty and staff, including graduate staff of the following policy:staff of the following policy:

Prohibited Purchasing Prohibited Purchasing PracticesPractices

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

Applies to:Applies to:

Requisitions Requisitions Expense Reimbursements (especially Expense Reimbursements (especially

over $25)over $25) Payment Request Forms for Payment Request Forms for

unencumbered paymentsunencumbered payments

Expense ReimbursementsExpense Reimbursements

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

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

Expense ReimbursementsExpense Reimbursements

Sales TaxSales Tax: The University is sales tax : The University is sales tax exempt for purchases made in Florida. exempt for purchases made in Florida. When using a purchase order or p-card When using a purchase order or p-card we don’t pay sales tax. When making a we don’t pay sales tax. When making a personal purchase and you are charged personal purchase and you are charged sales tax, if approved, the University sales tax, if approved, the University reimburses you back the full cost of the reimburses you back the full cost of the purchase including the sales tax but the purchase including the sales tax but the University never recoups sales tax. As University never recoups sales tax. As you can imagine this can add up over you can imagine this can add up over time.time.

Payment Request FormsPayment Request Forms Goods and Services should all come through FSU Goods and Services should all come through FSU

Purchasing, however, there is an allowable Unencumbered Purchasing, however, there is an allowable Unencumbered Disbursements list for certain things that can be purchased Disbursements list for certain things that can be purchased using a payment request form (PRF). For a complete listing, using a payment request form (PRF). For a complete listing, contact Accounts Payable. contact Accounts Payable.

Items being paid via a PRF should not be after the fact and Items being paid via a PRF should not be after the fact and thus a check would be cut to the vendor and the vendor thus a check would be cut to the vendor and the vendor would be shipping the merchandise, not the other way would be shipping the merchandise, not the other way around.around.

PRF’s can be used when a vendor doesn’t take purchase PRF’s can be used when a vendor doesn’t take purchase orders or p-card. If possible the University should consider orders or p-card. If possible the University should consider other vendors that do accept purchase orders before using other vendors that do accept purchase orders before using the payment request method.the payment request method.

Authority to Sign ContractsAuthority to Sign Contracts

Only certain individuals have the authority Only certain individuals have the authority to sign contracts (the President, Vice to sign contracts (the President, Vice Presidents, Director of Purchasing and Presidents, Director of Purchasing and certain Deans up to a particular dollar certain Deans up to a particular dollar amount). Purchasing requires a power of amount). Purchasing requires a power of attorney to be kept on file for anyone that attorney to be kept on file for anyone that has signature authority. has signature authority.

Even with signature authority, all Federal Even with signature authority, all Federal and State laws and University policies and and State laws and University policies and procedures must be followed.procedures must be followed.

Authority to Sign ContractsAuthority to Sign Contracts

Contracts over $10,000 require legal Contracts over $10,000 require legal review and must be either stamped or review and must be either stamped or signed off by General Counsel. signed off by General Counsel.

All contracts or agreements must be All contracts or agreements must be reviewed first by Purchasing and then reviewed first by Purchasing and then if necessary will be reviewed by legal. if necessary will be reviewed by legal. Again, if over $10,000 legal must Again, if over $10,000 legal must review after Purchasing reviews.review after Purchasing reviews.

Authority to Sign ContractsAuthority to Sign Contracts If at all possible this language is preferred for all If at all possible this language is preferred for all

engagement letters, contract documents or engagement letters, contract documents or agreements:agreements:

““If the conditions are satisfactory with you, please If the conditions are satisfactory with you, please sign below and return a copy of this letter to me. sign below and return a copy of this letter to me. Upon receipt of the signed agreement, the Upon receipt of the signed agreement, the University will create a purchase order, which will University will create a purchase order, which will serve as the contract”.serve as the contract”.

The purchase order should be the contract and any The purchase order should be the contract and any agreement or contract document should be agreement or contract document should be supplemental to the purchase order.supplemental to the purchase order.

Examples of Recent Confirming Examples of Recent Confirming OrdersOrders

Catering at the University Center ClubCatering at the University Center Club

*unaware of the cost of the *unaware of the cost of the catered services or the service catered services or the service charges.charges.

Blanket orders not issued as services Blanket orders not issued as services are required and then submitted 7-8 are required and then submitted 7-8 months later.months later.

Examples of Recent Confirming Examples of Recent Confirming OrdersOrders

Printing or design work submitted Printing or design work submitted after the work was completed.after the work was completed.

Copies Copies Charter buses secured 2 days prior to Charter buses secured 2 days prior to

departure.departure. Clothing (i.e. uniforms, shirts, etc.)Clothing (i.e. uniforms, shirts, etc.) Computer or A/V suppliesComputer or A/V supplies

Adverse Effects of Confirming Adverse Effects of Confirming OrdersOrders

Vendor assumes risk by providing Vendor assumes risk by providing goods/services.goods/services.

FSU employee assumes risk by FSU employee assumes risk by requesting goods/services without requesting goods/services without having an established payment having an established payment method.method.

Adverse effects of Confirming Adverse effects of Confirming OrdersOrders

Insufficient fundsInsufficient funds Budget closed or grant ended or Budget closed or grant ended or

grant may not allow the purchasegrant may not allow the purchase Overpayment for goods/servicesOverpayment for goods/services Potential LiabilityPotential Liability EH&S IssuesEH&S Issues Construction/Facilities IssuesConstruction/Facilities Issues Property Tag / Asset Management Property Tag / Asset Management

IssuesIssues

Adverse Effects of Confirming Adverse Effects of Confirming OrdersOrders

Lack of Administrative ApprovalsLack of Administrative Approvals By-passing State Law for procurement methodsBy-passing State Law for procurement methods By-passing Legal ReviewBy-passing Legal Review Taxation Issues – Conflict of Interest (Employee Taxation Issues – Conflict of Interest (Employee

Employer relationship)Employer relationship) Interest penalties / University Credit ratingInterest penalties / University Credit rating Supplier Diversity InitiativeSupplier Diversity Initiative Lack of Internal University ApprovalsLack of Internal University Approvals Risk of Audit write-upRisk of Audit write-up If it continues, and University continues to If it continues, and University continues to

support it, we would be granting inherent support it, we would be granting inherent authority to continue the practiceauthority to continue the practice

Internal University Internal University ApprovalsApprovals

Computing Equipment (over $20,000)Computing Equipment (over $20,000) Security Systems and Fire AlarmsSecurity Systems and Fire Alarms RenovationsRenovations CopiersCopiers Printing and CopyingPrinting and Copying Telephones and Telephone EquipmentTelephones and Telephone Equipment Radiological MaterialRadiological Material Uniforms or clothing for employeesUniforms or clothing for employees Legal ServicesLegal Services Signs, exterior (permanent)Signs, exterior (permanent) Controlled SubstancesControlled Substances Fans, Heaters, air circulators, etc.Fans, Heaters, air circulators, etc. Hazardous WasteHazardous Waste Traffic control & Personal Safety Devices / Law enforcementTraffic control & Personal Safety Devices / Law enforcement Contract and Grant RequisitionsContract and Grant Requisitions

Acceptable Purchasing Acceptable Purchasing MethodsMethods

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

Submission of a requisition to Purchasing Submission of a requisition to Purchasing via OMNI.via OMNI.

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

EmergenciesEmergencies

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

Confirming Order LogConfirming Order Log

Purchasing keeps a confirming order log which is Purchasing keeps a confirming order log which is reviewed by the Provost, and the Sr. V.P. for F&A.reviewed by the Provost, and the Sr. V.P. for F&A.

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

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

How to Prevent Confirming How to Prevent Confirming Orders?Orders?

Plan AheadPlan Ahead

Call Purchasing for help or expediting orders, obtaining price Call Purchasing for help or expediting orders, obtaining price quotes, bidding, or contract information.quotes, bidding, or contract information.

Know or read the University and Purchasing policies and Know or read the University and Purchasing policies and procedures.procedures.

Use a p-card for allowable p-card purchases when you can.Use a p-card for allowable p-card purchases when you can.

Enter a requisition in a timely manner to allow Purchasing to be Enter a requisition in a timely manner to allow Purchasing to be able to obtain competitive pricing, vendor information, missing able to obtain competitive pricing, vendor information, missing requisition information, etc.requisition information, etc.

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

How to Prevent Confirming How to Prevent Confirming Orders?Orders?

When watching for the PO number in When watching for the PO number in OMNI, make sure that the PO is in OMNI, make sure that the PO is in ““DispatchedDispatched” status before providing ” status before providing the PO number to the vendor. the PO number to the vendor. Dispatched status means that the Dispatched status means that the purchase order has passed budget purchase order has passed budget checking. If not in dispatched status checking. If not in dispatched status the PO could be in budget error.the PO could be in budget error.

How to prevent Confirming How to prevent Confirming Orders?Orders?

Remember, it takes more time to do Remember, it takes more time to do it the wrong way than the right way. it the wrong way than the right way. If in doubt our your not sure the If in doubt our your not sure the correct way to handle something, correct way to handle something, please contact Purchasing.please contact Purchasing.

How to Prevent Confirming How to Prevent Confirming Orders?Orders?

FSU Purchasing Department Main Phone Number: 644-6850FSU Purchasing Department Main Phone Number: 644-6850Website: www.purchasing.fsu.edu Website: www.purchasing.fsu.edu

To apply for a p-card contact Nancy Milburn at 644-9725 or To apply for a p-card contact Nancy Milburn at 644-9725 or nmilburn@admin.fsu.edu nmilburn@admin.fsu.edu P-card web page: http://www.purchasing.fsu.edu/Purchasing-Card-P-card web page: http://www.purchasing.fsu.edu/Purchasing-Card-Information Information

Confirming Orders: contact Karen Gibson, Associate Director of Confirming Orders: contact Karen Gibson, Associate Director of Purchasing, at 644-9729 or kgibson@admin.fsu.edu Purchasing, at 644-9729 or kgibson@admin.fsu.edu Confirming Order Justification FormConfirming Order Justification FormAndAndReimbursement Justification Form (routes to AP for approval): Reimbursement Justification Form (routes to AP for approval): http://www.purchasing.fsu.edu/DEPARTMENTAL-INFORMATION/Forhttp://www.purchasing.fsu.edu/DEPARTMENTAL-INFORMATION/Forms ms

On-site training can be made available to discuss compliance and On-site training can be made available to discuss compliance and procedures by contacting Karen Gibson or Nancy Milburn in procedures by contacting Karen Gibson or Nancy Milburn in Purchasing Services, at 644-6850.Purchasing Services, at 644-6850.