PROCEDURE FOR USING PURCHASE ORDERS
1. All items not eligible to be purchased from petty cash or by Procurement Card should be acquired by issuance of a purchase order. Direct Pay Forms are only to be used when no other means to purchase is available.
2. When contracts or tender documents are the controlling document, a purchase order is to be assigned to the document, with the purchase order number as a control point for all correspondence and payments related to the contract or tender. This is required in order to record the commitment on the Banner Finance System and to permit more effective budgeting.
3. Charge Accounts with Suppliers
3.1 It is the responsibility of the department issuing a purchase order to determine if the particular supplier will grant the University credit. This is done via the purchase order itself rather than formal application for credit.
3.2 The only employees who may issue purchase orders for goods and services are persons authorized by the Dean, Principal, Director, Grant holder; the University will not honour nor confirm commitments that have been made by others.
4. Emergency Purchasing
4.1 An emergency situation will meet one of the following conditions:
4.2 Generally, emergency order procedures will not be used unless such procurement practices would be offset by a corresponding or greater loss to the department as a result of the delay. Failure to anticipate a need is not, of itself, considered a bonafide emergency.
4.3 When emergency work has to be carried out, the following procedures will apply:
5. Creating a Purchase Order
5.1 The process of creating a purchase order starts with the preparation of a requisition for goods and/or services. This requisition is completed by the employee requiring the goods and/or services. Refer to PROCEDURE FOR DEPARTMENTAL REQUISITION.
5.2 When the employee designated to control purchasing within a department receives a requisition which requires the issuing of a purchase order, he/she is required to:
5.3 When the requisition has been approved in accordance with these guidelines, the purchase may be processed.
Quotations for all acquisitions of goods and services must be obtained using the following guidelines.
6.1 Purchase of Computers and Related Supplies
With respect to the purchase of computers, computer components, printers and other related supplies: If the University's Computer Purchasing Centre (CPC) can provide the required items, then the items may be purchased directly from CPC without obtaining alternate price quotations (as CPC has already performed this function). However, if the purchaser wishes to obtain his/her own price quotations with respect to one of these items, or, if the system configuration required is not available from CPC, then one of the required three price quotations must be obtained from the Computer Purchasing Centre.
6.2 Purchases of $1,000 or Less
No quotations are required for purchases up to $1,000 before taxes.
6.3 Purchases Between $1,000 and $2,500 in Value
Three telephone quotations or current catalogue prices must be obtained for purchases of goods and/or services which are greater than $1,000 (before taxes) and less than $2,500 (before taxes) in total value. Quotations should be recorded on a quotation summary log (sample), and a copy attached to the invoice if paying by Direct Pay or Procurement Card, or retained with the Purchase Order if a Purchase Order is the method of acquisition.
6.4 Purchases between $2,500 and $10,000 in Value
6.5 Purchases Greater Than $10,000 in Value
All purchases with a value greater than $10,000 will require a public tender. Refer to the PROCEDURE FOR USING PUBLIC TENDER.
6.6 Purchases without Quotation
7. Pricing of Purchase Orders
It is the responsibility of the department, having in mind the specifications for the goods and services set out on the requisition, to select the supplier and to establish the price to be paid in accordance with these guidelines.
7.1 Correct Pricing
It is the responsibility of the employee designated to control purchasing within a department to ensure that the prices quoted are current prices. The Department of Financial and Administrative Services will request additional approvals if the supplier invoice is not in agreement with the applicable purchase order within specified limits.
Catalogues are only to be used as a source for obtaining quotations. Pricing purchase orders from a catalogue is not permitted, as generally the prices are not current.
To reduce freight charges and claims against carriers for damaged shipments, indicate on the purchase order "FOB destination". FOB means "free on board," i.e., the supplier is responsible for ensuring the goods arrive at the University (destination). Refer to PROCEDURE FOR RECEIVING PURCHASED GOODS AND SERVICES.
Departments will grant all competitive bidders equal consideration. Preference for the same supplier must not be shown if there are other suppliers of equal ability to supply. If there are more than three suppliers for a specific commodity, then rotation of suppliers is required.
8.1 The department, having complied with the provisions of these guidelines, will issue the purchase order, representing the contract for the goods or services, and will record required delivery, sales tax, freight, and delivery location.
8.2 It is very important that the department complete all applicable information as to the date required, shipment method, payment discount, department, building including room number, insurance coverage, and to only accept for FOB the University.
8.3 For commitment purposes the department must estimate the freight charge involved, as well as the Harmonized Sales Tax.
8.4 When a purchase order is issued to one company for a large variety of supplies, one purchase order should be used with a supplementary list of items required attached as a separate list.
8.5 Departments should not issue several purchase orders for identical items to the same supplier. When the total requirement is known, a purchase order should be issued for that requirement with more than one delivery date given.
9. Supplier Invoices
9.1 All supplier invoices are to be sent directly to the Department of Financial and Administrative Services for processing. Exceptions to this procedure should be arranged with the Director of Financial and Administrative Services prior to placing the order. A cheque cannot be generated without the original invoice and the receiving completed on the purchase order.
9.2 The supplier's invoice must show all particulars of the transaction. Monthly statements are not acceptable as invoices.
9.3 When an invoice is handwritten, it must bear the signature of the supplier as follows:
9.4 Due to the nature of some expenditures, the Department of Financial and Administrative Services will process payment of invoices prior to obtaining departmental approval. The following types of expenditures apply:
9.5 These invoices will be checked and verified at the Department of Financial and Administrative Services.
9.6 Internal invoices for requisitions within the University will be processed on receipt by the Department of Financial and Administrative Services. If you find that the invoice is incorrect, please contact the department from which the charge originated and arrange for an adjustment.
10. Standing Purchase Order
In situations where supplies and services are required on a recurring basis throughout the year, a standing purchase order can be issued. This purchase order will state the estimated yearly cost to be incurred and the contract should be awarded in accordance with the tendering procedures. All standing purchase orders will be for the fiscal year only. For each purchase on a standing purchase order, complete the receiving for each order received and forward the invoice to Accounts Payable in order to reduce the outstanding commitment.
11. Bulk Purchasing
The department which is the major user of items needed on a recurring basis may be requested to purchase for the consolidated University requirements. Offices requiring these materials should submit their requisition, once it is approved within their departmental office, to the department responsible for the central supply. An interdepartmental billing will be processed by the issuing department for reimbursement of funds.
The following guidelines should be followed for contracts for services which are of a continuing nature, or are to be carried forward from one fiscal year to another. Examples of such contracts would be contracts for repairs or construction to the physical facilities, the University catering contract, contract for professional services, rentals, maintenance contracts such as cleaning, painting, and snow clearing, etc.
12.1 The awarding of contracts will follow the public tender guidelines.
12.2 Contracts, before being awarded, should be reviewed by the employee responsible for purchasing, in order to ensure all legal implications have been accounted for. Such implications include, but are not limited to:
12.3 All contract documents should state specifically the procedure to be followed for billing the University for the work that has been performed.
12.4 Copies of all contracts should be forwarded to the Department of Financial and Administrative Services for safe keeping.