(AFTER-THE-FACT ORDERS) Confirming Orders

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

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, Procard or approved Direct Pay Expenserequest form.

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

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

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

Prohibited Purchasing Practices Placing orders for goods or services directly with vendors, instructing the vendor to invoice California Maritime Academy before the Procurement Department has issued a purchase order to that vendor. Using a personal credit card or personal funds to purchase goods or services for the department, with the expectation of being reimbursed by Cal Maritime.

Expense Reimbursements 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 Procard or out in the field performing research at a more remote location and you need to purchase something for that research but vendor doesn’t take Procard)

Payment Request Forms Goods and Services should all come through Procurement, however, there is an allowable alternative that commodities under $2,000 can be purchased using a Direct Expense form. Items being paid via a DEF form. Should not be after the fact and thus a check would be cut to the vendor and the vendor would be shipping the merchandise, not the other way around. DEF forms can be used when a vendor doesn’t take purchase orders or Procard. If possible the University should consider other vendors that do accept purchase orders before using the Direct Pay method.

Authority to Sign Contracts Only certain individuals have the authority to sign contracts (the President, Vice President, AF and Director of Procurement. Even with signature authority, all Federal and State laws and University policies and procedures must be followed.

Examples of Recent Confirming Orders All contracts or agreements must be reviewed first by Procurement and then if necessary will be reviewed by legal.

Adverse Effects of Confirming Orders Vendor assumes risk by providing goods/services. Cal Maritime employee assumes risk by requesting goods/services without having an established payment method. The Division VP has to approve the expense. (Approval Form) Insufficient funds Budget closed or grant ended or grant may not allow the purchase Overpayment for goods/services Potential Liability/Insurance Requirements EH&S Issues Construction/Facilities Issues Property Tag / Asset Management Issues

Adverse Effects of Confirming Orders Lack of Administrative Approvals By-passing State Law for procurement methods By-passing Legal Review Taxation Issues – Conflict of Interest Interest penalties / University Credit rating Small Business/DVBE 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

Internal University Approvals Computing Equipment (over $20,000) Security Systems and Fire Alarms Renovations Copiers Printing and Copying Telephones and Telephone Equipment Hazardous materials 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 Purchasing Methods Procard if allowable by the Procard program. Newly revised policies and procedures have expanded the flexibility of the Procard, so that its use can be more closely tailored to the needs of the department. Submission of a requisition to Procurement. Direct Expense Form for commodities under $2,000.

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

How to Prevent Confirming Orders? Plan Ahead Call Procurement for help or expediting orders, obtaining price quotes, bidding, or contract information. Know or read the Procurement policies and procedures. Use a Procard for allowable purchases when you can. Enter a requisition in a timely manner to allow Procurement to be able to obtain competitive pricing, vendor information, missing requisition information, etc. Lack of knowledge or saying someone was new is not sufficient for approval.

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