1. Slide 1August 2, 2012 Confirming Orders (After-the-fact orders)

2. Slide 2August 2, 2012 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.

3. Slide 3August 2, 2012 University and Procurement 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.

4. Slide 4August 2, 2012 Delegation of Procurement The President, through the Vice President for Finance and Administration, has delegated the procurement function to the Director of Procurement Services. 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.

5. Slide 5August 2, 2012 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 (vendor) for the purchase. Requisitioning departments shall never assume that their recommended vendor will be the vendor/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 contractor should never be allowed to provide a service or deliver a commodity before a requisition is prepared and a PO issued. Delegation of Procurement

6. Slide 6August 2, 2012 Even when legal authority exists via a power of attorney, all contracts and agreements require review and approval by the Procurement Services prior to the signing of the contract document, and a Requisition must be submitted, and a PO 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. Delegation of Procurement

7. Slide 7August 2, 2012 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.”

8. Slide 8August 2, 2012 Prohibited Procurement Practices Placing orders for goods or services directly with vendors, instructing the vendor to invoice FSU before the Procurement Services has issued a PO 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 FSU, unless the amount is less than $25.00.

9. Slide 9August 2, 2012 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

10. Slide 10August 2, 2012 Applies to: Requisitions Expense Reimbursements (especially over $25) Payment Request Forms for unencumbered payments

11. Slide 11August 2, 2012 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 vendor doesn’t take p-card and no access to the OMNI system)

12. Slide 12August 2, 2012 Sales Tax: The University is sales tax exempt for PO or P-Card we don’t pay sales tax. 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. As you can imagine this can add up over time. Expense Reimbursements

13. Slide 13August 2, 2012 Payment Request Forms Goods and Services should all come through Procurement Services however, 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.Unencumbered Disbursements list 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 would be shipping the merchandise, not the other way around. PRF’s can be used when a vendor doesn’t take POs or P-Card. If possible the University should consider other vendors that do accept POs before using the payment request method.

14. Slide 14August 2, 2012 Examples of Confirming Orders Catering at the University Center Club *unaware of the cost of the catered services or the service charges. Blanket orders not issued as services are required and then submitted 7-8 months later.

15. Slide 15August 2, 2012 Printing or design work submitted after the work was completed. Copies Charter buses secured 2 days prior to departure. Clothing (i.e. uniforms, shirts, etc.) Computer or A/V supplies Examples of Confirming Orders

16. Slide 16August 2, 2012 Adverse Effects of Confirming Orders Vendor assumes risk by providing goods/services. FSU employee assumes risk by requesting goods/services without having an established payment method.

17. Slide 17August 2, 2012 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 Adverse Effects of Confirming Orders

18. Slide 18August 2, 2012 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

19. Slide 19August 2, 2012 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

20. Slide 20August 2, 2012 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. Unencumbered Disbursements list.

21. Slide 21August 2, 2012 Emergencies If you have a bona-fide emergency and the University is closed or your in travel status and do not have a P-Card or vendor 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.

22. Slide 22August 2, 2012 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 vendor. Vendors 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 number, P-card number or University check).

23. Slide 23August 2, 2012 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 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.

24. Slide 24August 2, 2012 When watching for the PO number in OMNI, make sure that the PO is in “Dispatched” status before providing the PO number to the vendor. Dispatched status means that the purchase order has passed budget checking. If not in dispatched status the PO could be in budget error. How to Prevent Confirming Orders?

25. Slide 25August 2, 2012 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. How to Prevent Confirming Orders?

26. Slide 26August 2, 2012 How to Prevent Confirming Orders? Procurement Services Main Phone Number: 644-6850 Website: www.procurement.fsu.eduwww.procurement.fsu.edu To apply for a P-Card contact Nancy Milburn at 644-9725 or nmilburn@.fsu.edu nmilburn@.fsu.edu P-Card web page: www.procurement.fsu.edu/how/buy/p-cardwww.procurement.fsu.edu/how/buy/p-card Confirming Orders: contact Karen Gibson, Associate Director of Procurement Services, at 644-9729 or kgibson@.fsu.edukgibson@.fsu.edu Confirming Order Justification Form and Reimbursement Justification Form (routes to AP for approval): www.procurement.fsu.edu/forms www.procurement.fsu.edu/forms On-site training can be made available to discuss compliance and procedures by contacting Karen Gibson or Nancy Milburn in Procurement Services, at 644-6850.

27. Slide 27August 2, 2012 QUESTIONS?