Budget and Finance Procedures

Transcription

1 TABLE OF CONTENTS SCEIS Access... 2 Signature Authorization... 3 Grants and Contracts... 4 Time Limited and Temporary Grant Positions... 6 Budget /Cash Transfer and Journal Entry Request... 7 Petty Cash... 8 Donations and Contributions Agency Billings/Invoicing Invoice Cancellation/Adjustment Invoice Collection Write-Offs Checks or Currency for Deposit Accounts Payable Invoice Payment Direct Payment Interdepartmental Transfers (IDTs)-Payables Goods Receipt or Invoice Mismatch Report Disbursement of Checks Lease Agreements and Service Contracts Capital Assets and Inventoried Assets Capital Assets: Permanent Improvement Projects Travel Guidelines and Regulations Financial Reports Revised January 29, 2015 Page 1

2 SCEIS Access Purpose: To establish procedures for handling role assignments and access to specific transactions in SCEIS. Procedures: Offices will send an to the Office of Internal Operations General Ledger requesting access for individuals. The requirements or job duties should be described so that appropriate roles may be assigned. Also, the must be approved by the Division Director or his/her designee as appropriate. Roles fall into several categories: 1. Accounts Receivable 2. Deposits 3. Accounts Payable 4. General Ledger 5. Budgeting 6. Reporting 7. Business Warehouse 8. Imaging Please note that any subsequent changes to the roles must be sent to: Budget & Control Board Office of Internal Operations-General Ledger Attn: Renee Herndon Capitol Center Building 1201 Main Street, Suite 400 Columbia, South Carolina Revised January 29, 2015 Page 2

3 Signature Authorization Purpose: To establish procedures for Divisions to provide signatures for personnel authorized to approve transactions. Annually, Internal Operations General Ledger will obtain signatures of all personnel from the Divisions who will approve transactions by signature or initials. The Divisions should also notify Internal Operations General Ledger when there is a change in an authorized approver. The Authorized Signature form is located on the Internal Operations website Revised January 29, 2015 Page 3

4 Grants and Contracts Purpose: To establish procedures to create grants in SCEIS The authority for and the requirements of the grants and contract review (GCR) process, are delineated in the S.C. CODE Ann. Title 2 Chapter 65 titled The South Carolina Federal and Other Funds Oversight Act (ACT) The grant/contract and review procedures are overseen by Internal Operations General Ledger. Definitions: GCR-1 Form: Funding documents over $200,000 GS-7 Form: Funding documents $200,000 and under The following information outlines what is required by the ACT: Funding authorization through the GCR process is required when funds, we will be receiving or have received, are not part of the currently approved State budget. Consequently, funds cannot be expended prior to approval of the GCR-1 Form-Federal/Other Financial Assistance Greater than $200,000 or the GS-7 Form-Federal/Other Financial Assistance $200,000 and Less. The forms and instructions for both the GCR-1and the GS-7 are available on the State Budget website at Internal Operations General Ledger will complete the forms for the divisions receiving the grant funds. Documents to be submitted: 1. Copy of the funding award document signed by grantor and recipient 2. Copy of a detailed budget Award documents must provide: 1. Title of the grant, contract, or any other funding documents 2. Catalog of Federal Domestic Assistance (CFDA) Program Information Number (if federal). To obtain or verify this information go to Web site: and select Search for Assistance Programs and then select All Programs Listed Numerically 3. Executive Order process status (if federal). To obtain or verify this information go to Web site: and select Search for Assistance Programs and then select By Programs Requiring Executive Order Review 4. Funding period (start and ending dates of the grant or contract) 5. Amount by fund type (federal, state, other) 6. Number of personnel funded, by personnel type permanent, temporary, time limited or temporary grant positions. Contact Board Human Resources for requirements on posting time limited and temporary grant positions (see page 5 for information on Time Limited and Temporary Grant Positions) 7. Type of funding: advance or reimbursement; generally all grants are reimbursement grants Revised January 29, 2015 Page 4

5 8. Scope of service(s) Allow approximately 10 business days for completion of the entire GCR process. Expenditure of funds cannot be made until the GCR process is complete and the appropriate master data and budget has been established in SCEIS. Procedure for Establishing a Grant or Contract: A. Internal Operations General Ledger will create a new grant master record in SCEIS and provide the grant number to the recipient division as well as add the SCEIS grant number to all forms required by State Budget. The award documentation will be imaged and attached to the grant master record in SCEIS. B. When a change occurs to an existing grant/contract (change in grant/contract period, award amount or scope of services), the recipient Division must send the notice of change to Internal Operations General Ledger as well. All adjustment notices will be imaged and attached to the grant record in SCEIS. C. Internal Operations General Ledger will forward the GCR-1/GS7 Form(s) and grant award to State Budget for approval. Internal Operations General Ledger will prepare a D-38 Form (federal funds only) and submit it to State Budget with the GCR-1/GS-7. The D-38 Form is used to load the grant/project and phase(s) on the Statewide Accounting and Reporting System (STARS), which is required for Federal grants/contracts. D. If additional authorization is required due to an increase in funding, Internal Operations General Ledger will coordinate with Governmental Affairs to adjust the grant/contract budget based on the award documents and grant/contract period. E. Upon approval of the GCR-1/GS-7 and the D-38 Forms, State Budget will send Internal Operations General Ledger an approval letter (GS-5 Form) and a signed, approved D-38 Form with the assigned project and phase number. F. Following receipt of the approved GS-5 and D-38, if a new Functional Area or Sponsored Program is required, Internal Operations General Ledger will establish the new master data. G. Governmental Affairs will notify the Program area when the budget has been established in SCEIS for the new grant/contract. Expenditures can then be charged to the grant or contract. Revised January 29, 2015 Page 5

6 Time Limited and Temporary Grant Positions Purpose: To establish a procedure for Divisions of the Budget and Control Board to request a time limited or temporary grant position. Definitions: A. Time Limited Position Established to perform work directly associated with a time limited project. The time limited position may not extend beyond the duration of the project. B. Time Limited Project Specific work products or services provided by a State agency to another State agency, local government, public or private entity over a specified time period as a contractual arrangement. The contractual agreement defines the time limited project and must include the beginning and ending date, amount and source of any funds provided in support of the project. C. Temporary Grant Position Established to perform work directly associated with Federal grants, public charity grants, private foundation grants, or research grants. Temporary grant positions will not extend beyond the duration of the grant. Procedures: A. If a Division enters into a contract or receives a grant that includes a position dedicated to the contract or grant, the Division must complete a Request for Temporary Grant or Time-Limited Position Request form. This form and instructions for completing the form are located at The Division must also contact their Board Human Resources Liaison for instructions related to the position description and posting of the new time limited/temporary grant position. B. The Request for Temporary Grant/Time Limited Action Form and all other documentation required by Board Human Resources, such as the position description, must be sent to Governmental Affairs. Governmental Affairs will process the forms and forward to State Budget after Board Human Resources has approved the paperwork related to the position for posting. C. After approval of the time limited or temporary grant position by State Budget and once the position and grant are established in SCEIS, Governmental Affairs will notify the Division and Board HR of the position number and SCEIS grant number. The position may then be advertised for hiring. D. Any change in the grant or contract will also require an update to the time limited/temporary grant position information. See procedures for Grants and Contracts. E. Governmental Affairs will provide a listing of a Division s time limited and temporary grant positions, to include filled and vacant positions and end dates associated with those positions upon request. Revised January 29, 2015 Page 6

7 Budget /Cash Transfer and Journal Entry Request Purpose: To establish procedures for Divisions of the Budget and Control Board to request a change in program budgets or to request cash transfers or journal entries. Procedures: Budget Transfers: Budget transfers require a completed "Budget Transfer Request" Form. This form is available in hard copy on the Internal Operations website Transfer Request.xls The request must be made by budget liaisons or Division Directors and comply with all statewide guidelines established by State Budget and the Comptroller General s Office. Completed forms should be sent or ed to Governmental Affairs. If Governmental Affairs is unable to record the transfer within the next two business days, appropriate personnel will be notified. Cash Transfers: Cash transfers may be requested via to Renee Herndon at rherndo@io.sc.gov. Cash transfer requests must be requested by finance/budget liaisons or Division Directors and comply with all statewide guidelines established by the Comptroller General s Office. The transfer request must include an explanation, including any references to provisos if applicable, for the transfer. Explanations should be as clear and complete as possible. Internal Operations General Ledger will notify appropriate Division staff of the transfer(s) document number(s) and date(s) posted via after the transfer(s) completion. Journal Entries: Journal entry requests should be made by to Renee Herndon at rherndo@io.sc.gov. The request must be made by budget/finance liaisons or Division Directors and comply with all statewide guidelines established by the Comptroller General s Office. The request should include the reason for the change, the document number(s) affected by the requested change and all required account assignments (General Ledger Account, Cost Center, Functional Area, Fund, Grant, Internal Order, WBS). Divisions may also use the Journal Entry Template General Ledger will provide the SCEIS document number to the requesting division once the entry has been made. Revised January 29, 2015 Page 7

8 Petty Cash Establishing a Petty Cash or Change Fund Purpose: To establish procedures for Divisions of the Budget and Control Board to set up a petty cash or change fund (for cash registers) or change the authorized amount of an existing petty cash or change fund. Procedures: A. Prepare a letter of request from the Division Director on letterhead providing the following: 1. Type of request: petty cash fund, change fund (cash register), or change in amount of either. The maximum allowable amount is $ (provided the need justifies the amount) 2. Reason for the fund 3. Amount requested 4. Source of funding 5. Name of authorized custodian B. An outline of the internal controls over the funds. C. Forward the signed letter and internal controls procedures to: Budget and Control Board Internal Operations Attention: General Ledger Capitol Center 1201 Main Street, Suite 400 Columbia, South Carolina D. Internal Operations General Ledger will review and forward the letter and internal controls procedures to Budget and Control Board s Internal Audit Services. E. Upon approval of the internal controls by the Board s Internal Audit Services, Internal Operations General Ledger will request approval for the fund or change in the amount of the fund from the State Auditor's Office (SAO). If the SAO approves, Internal Operations General Ledger will set up the fund in accordance with the Comptroller General's Policies and Procedures in the amount requested, or increase the existing fund. F. Internal Operations General Ledger will notify the requesting Division in writing when the fund has been established. The check, made payable to the authorized custodian, will be sent to the requesting Division upon receipt from the Treasurer s Office. G. The authorized custodian must cash the check and secure the funds. Revised January 29, 2015 Page 8

9 Disbursements from a Petty Cash Fund Purpose: To establish procedures for disbursing funds from a petty cash fund. A. Disbursements of petty cash must be limited to small disbursements. B. Petty cash disbursements must follow the intent of the Comptroller General s Policies and Procedures, section Specifically, petty cash should only be used in situations where emergency purchases of small items must be made immediately. Whenever possible, Divisions should arrange to be billed for items purchased or use the purchasing card. Procedures: A. The employee seeking reimbursement must present a cash receipt for all items purchased to the custodian of the fund. B. The custodian will prepare a pre-numbered petty cash voucher and attach the cash receipt. The voucher must then be signed by the Division Director or his or her authorized designee. C. Once the petty cash voucher has been approved for payment, cash in the amount of the voucher is disbursed to the requesting employee, who will sign the voucher acknowledging receipt of the cash. D. The custodian will retain all copies of the petty cash voucher documentation to support replenishment. Replenishment of Petty Cash Fund Purpose: To establish procedures for replenishing a petty cash fund. Procedures: A. Replenish the petty cash fund when approximately 50% of the fund has been expended or at fiscal year-end. B. Prepare a disbursement request in the appropriate amount, payable to the custodian. Indicate the account assignments (Cost Center, Functional Area, Fund, Grant, Internal Order, WBS) and amount for each expenditure general ledger account (GLA) to be reimbursed. C. Scan each cash receipt with the disbursement request as one document and forward to Internal Operations Accounts Payable. The Division must retain a copy for its records. D. Accounts Payable will process the voucher for payment E. Upon receipt of the contingent check from Internal Operations, the custodian should cash the check and secure the funds. F. Upon receipt of the funds and if all petty cash documentation has been imaged in SCEIS, the cash receipt copies may be destroyed. Revised January 29, 2015 Page 9

10 Donations and Contributions Purpose: To establish a procedure for Divisions of the Budget and Control Board to control, document and account for donations and contributions received. Procedures: The agency may receive donations and contributions in three forms - cash, construction, and other (such as gifts of property). Each is covered by separate, distinct authorities of laws, regulations and procedures. How to obtain authority to spend donated funds: Cash: Grants and/or Contracts receiving cash contributions or donations: Procedures to obtain spending authority are covered in Section of the Comptroller General's Accounting Policies and Procedures Manual. This references Section of the Code of Laws of South Carolina Approval is obtained using the same procedures as required for Grants and Contracts. A summary of these procedures follows: Contact Internal Operations General Ledger to obtain proper forms. General Ledger will coordinate with the Governor's Office to ensure that proper approvals are obtained. General Ledger will notify the requesting Division of approval. Donation Forms may be developed and used to supplement this process. Charitable Cash/Check Contributions: Any Board Division receiving donations of money must provide the donor written acknowledgement of the donation showing the Division name, the date and amount received with the name and address of the donor. Generally, there is allowed a charitable contribution for tax purposes for individuals if the contribution is made exclusively for public purposes. Note: IRS Bulletin states For any contribution of $250 or more, 170(f)(8) provides that no deduction is allowed unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgement of the contribution by the donee organization. The contemporaneous written acknowledgment must contain the following information: the amount of cash and a description of any property other than cash contributed; a statement whether the donee organization provided any goods or services in consideration for the contribution; and a description and good faith estimate of the value of any goods or services provided in consideration for the contribution, or, if the goods or services consist solely of intangible religious benefits, a statement to that effect. Common practice is for the donee to provide written documentation for all donations, irrespective of amount. Revised January 29, 2015 Page 10

11 Construction Donations Received: Procedures for construction donations are covered in Chapter 4 of the State Engineer's Manual for Planning and Execution of State Permanent Improvements. A summary of these procedures follows: A budgetary impact analysis must be prepared. If this is positive, the Division shall negotiate a tentative agreement with the donor. Simultaneously, all necessary construction documents are prepared. The State Engineer must approve the donation before obtaining Budget & Control Board approval. The State Engineer will monitor the construction. Other Donations Received (real or personal property) Internal Operations Capital Assets must be notified with appropriate information to ensure the donation is properly recorded at Fair Market Value. Policy on Donations: This policy will apply to the consolidated divisions of the South Carolina Budget and Control Board (Board). The Board will accept donations cash (monetary asset) and property, plant and equipment upon compliance with: ethical rulings issued by the State Ethics Commission that relate to donations of money and equipment, of the Code of Laws of South Carolina 1976 which requires that approval be secured from the Governor and Joint Appropriation Review Committee to receive and expend any funds, and Section 170 of the Internal Revenue Code (Code) Charitable, etc., contributions and gifts. Recording Donated Cash: 1. Cash will be recorded in the Board s accounting records as revenue at the time of receipt. 2. Revenue will be classified under the proper revenue general ledger account in accordance with the Comptroller General s regulations. 3. The receipting and depositing of cash will be in accordance with these procedures which comply with Comptroller General regulations and the Appropriation Act (shall be deposited in the State Treasurer to special accounts and shall be withdrawn from the Treasury as needed to fulfill the purposes and conditions of the donations if specified and if not specified as may be directed by proper authorities of the department). Recording Donated Capital Assets: 1. Property, plant, and equipment assets donated will be recorded in the Board s accounting records at their estimated fair market value at the date of the gift in accordance with generally accepted accounting principles. 2. The fair market value (the price a willing seller would sell to a willing buyer, neither under any compulsion to buy or to sell) will be determined by the Capital Asset Unit. The Capital Asset Unit will determine the fair market value of the assets by reference to the estimated realizable value of similar assets that are sold for cash, quoted market prices, independent appraisals or other available evidence. 3. In situations where the fair market value cannot be determined with reasonable accuracy, the fair market value will be the recorded book value of the monetary assets by the contributor less a reduction for impairment. Revised January 29, 2015 Page 11

12 Control of Donated Capital Assets: 1. For donated capital assets permanently transferred to the Board and meet the Board s capitalization criteria, the assets will be controlled by the Board s Capital Asset Unit following its established procedures. 2. For the capital assets that are loaned to the Board, the Board Division will compile a listing of the equipment and forward a copy to the Capital Asset Unit. The Division is to keep the listing accurate and current and notify the Capital Asset Unit of any changes. Once a year, the Division must provide confirmation of these loaned assets. Confirmation must include an inventory listing signed by the custodian indicating assets have been accounted for. Use of Donations: 1. Cash and equipment donations will be expended and used in the program for which the assets were given. 2. The expenditure of funds shall be subject to the same limitations and provisions of law applicable to the expenditures of appropriated funds this means that all state rules, regulations and laws applying to the disbursement of appropriated funds will apply. 3. The disbursement documents expending funds which were donated for a specific purpose will indicate the specific purpose on the voucher as required by the Comptroller General s Office (CG). Revised January 29, 2015 Page 12

13 Agency Billings/Invoicing Purpose: To establish a procedure for Divisions of the Budget and Control Board to request billing/invoicing for goods, services or reimbursements of expenses from other agencies or vendors. Procedures: There are two ways bills or invoices may be generated within the Budget and Control Board: Internal Operations-Accounts Receivable prepares invoice Division Software System Interfaces with SCEIS Internal Operations-Accounts Receivable Prepares Invoice 1. Complete Part I - "Request for Billing" section of "Billing/Invoice Transmittal Form" Information attached to "Billing/Invoice Transmittal Form" must be grouped by customer. If documentation is to be mailed with the invoice, please check the appropriate block. 2. The "Billing/Invoice Transmittal Form" must be signed and dated by an authorized individual and forwarded to Internal Operations-Accounts Receivable, 1201 Main St, Suite 400, Columbia, SC, by mail or at accountsreceivable@io.sc.gov. 3. Internal Operations-Accounts Receivable will key the billing/invoice in SCEIS. All bills/invoices will be mailed with the appropriate remittance advice(s). 4. A document number for each bill/invoice generated will be ed to the requesting Office for their files, if requested. Division Software System Interfaces 1. Hard copies of invoices generated by a Division s software system will be forwarded to Internal Operations- Accounts Receivable with an Invoice Register for mail out, with the exception of DTO. Detail information will be interfaced into SCEIS with appropriate effective dates and images. 2. If the interfaced documents have errors, the Division is notified to make the appropriate adjustments. Revised January 29, 2015 Page 13

14 Invoice Cancellation/Adjustment Purpose: To establish procedures to request cancellation/adjustment of billings/invoices/credit memos. Procedures: Divisions may request cancellations, adjustments, and/or credits to bills or invoices due to billing errors or when a customer returns merchandise or any situation which may require a change in the original billed amount. The Division must complete the Request for Invoice Credit Memo or Reversal Form Form.xlsx 1. The Division must ensure all information is correct. 2. The Request for Invoice Cancellation/Adjustment must be signed by an authorized person from the Division. Generally this will be the Budget/Fiscal Liaison or the Director. Internal Operations-Accounts Receivable will process the billing adjustment in SCEIS. Once completed, if applicable, a new invoice will be generated and Internal Operations-Accounts Receivable will notify the requesting Division of the SCEIS document number. Invoice Collection Purpose: To establish procedures collections of outstanding invoices. Procedures: Internal Operations-Accounts Receivable serves as Tier One support for collections for Divisions of the Budget and Control Board. 1. Customers are contacted once an invoice is sixty days past due. 2. If an address is available, the customer is ed at least twice. If the invoice payment is still not collected or a response is not received, then a telephone call is made for continued collection attempts. Division liaisons are also copied on communications. 3. Internal Operations handles any disputes. If the dispute cannot be resolved, the Division is contacted to resolve any issues with the customer 4. Internal Operations will work to resolve any issues with the customer. If Internal Operations cannot resolve the issues, the Division may be contacted to help the customer. Revised January 29, 2015 Page 14

15 Write-Offs Purpose: To establish a procedure for writing off invoices deemed uncollectible. Procedures: 1. If the collection process is unsuccessful and the invoice is older than one year and less than $1,000 Internal Operations may write off. 2. If an invoice is over $1,000, Division management must approve the write-off. 3. Internal Operation will utilize the Department of Revenue Governmental Enterprise Accounts Receivable Program to attempt to collect debts past due where appropriate. Revised January 29, 2015 Page 15

16 Checks or Currency for Deposit Purpose: To establish a procedure for receipt and transmittal of cash or checks by Divisions of the Budget and Control Board for deposit by Internal Operations. Procedures: 1. All checks collected must be restrictively endorsed. If the Division does not endorse the check, Internal Operations will endorse. This endorsement would typically be phrased For deposit only to the credit of the State Treasurer of South Carolina on the back of the check. 2. Cash collections will be delivered to the Cashier in Internal Operations by 3:00 p.m. daily. Cash must be placed in a secure location when on your premises. Cash will be counted in the presence of the person delivering cash and a receipt will be provided. 3. Remittances and cash transmittals will be retained with a copy of the cashier s daily deposit. The validated deposit slip will serve as evidence that all cash and checks have been deposited. Internal Operations utilizes Remote Deposit Capture for checks. Scanned images of checks may be retrieved upon request. 4. All monies (cash or check) must be delivered to Internal Operations for deposit within three business days of receipt. Revised January 29, 2015 Page 16

17 Accounts Payable Invoice Payment Purpose: To establish a procedure for payment of Vendor and/or State Agency invoices for goods and/or services received. Approvals: Signature approval limits for the expenditures of the Board are established as follows (excludes IDTs): Program Managers $0 to $4, Division/Deputy Directors $5, to $49, Chief of Staff $50, and above Items exempt from internal Board approvals above the Program Manager level are identified as follows: Confederate Relic Room and Military Museum o Relics o Gift Shop Items IRF Trust Fund disbursements Non-administration payments from Trust Funds GSA-vehicles bought at auction for Surplus Property Inventory revolving accounts-not on inventory in SCEIS Refunds of Revenue from Surplus Property for Due Agency Other Division Specific Exemptions (approval is dependent upon the exemption) Items exempt from internal Board approvals (any level) are identified as follows: Commercial Vehicle Repair Payments Rent to non-state entities Sales & Use Tax Payments to Department of Revenue Utilities regulated by PSC o Electricity o Propane/Fuel Oil o Water o Telephones (land lines) Special Items Local Government Loans and Grants Loans and grants that were legally obligated and in the process of disbursement before March 4, 2011 do not require further approval. (May 27, 2011 memorandum) For a new loan or grant to local governments or public utilities, Local Government must obtain approval of the Chief of Staff before issuing commitment letters or otherwise obligating the agency. Approval is required for the award or commitment only. Subsequent disbursements pursuant to an approved loan or grant do not require further approval provided the sum of all disbursements does not exceed the amount approved by the Chief of Staff. (Revised and copied from the May 27, 2011 memorandum.) Revised January 29, 2015 Page 17

18 Invoice Types: Payment methods for goods and/or services are identified in one of three categories: 1. Direct payment (no Purchase Order) 2. Payment relating to a Purchase Order 3. Interdepartmental Transfer (IDT) Direct Payment A direct payment is used for a payment to a vendor or State Agency for the purchase of certain goods and services without the use of a purchase order. A direct payment is used when the purchase order method is not practicable. It should not be used as a matter of convenience as it leads to the reduction in controls and approvals. The types of expenditures described below serve as a guide for direct payment invoices. Goods or services not included in the categories below must be purchased via a purchase order. The improper use of a direct payment may lead to limitations on an agency s ability to use this method. A direct payment is a payment method only. It does not establish compliance with the SC Consolidated Procurement Code & Regulations or other State regulations which is required. Types of Direct Payment: The expenditures for the purposes listed below may be paid without the use of a purchase order (per the State of South Carolina Policy for Use of Purchasing/Payment Document Type). Supplies, services, information technology, or construction exempt from the SC Consolidated Procurement Code & Regulations. See %29_%28booklet%29.pdf for a current list of exemptions from the Code. Appendix A. IRF trust fund expenses paid in compliance with the SC Consolidated Procurement Code & Regulations Court ordered interpreters Honorariums & stipends Inter-Departmental Transfers (IDT) processed via ZIDT Inter-Governmental expenditures paid by check P-Card statements Federal criminal background checks paid to external governmental agencies One-time vendor payments to vendor IDs (Vendors not on vendor master file) Small payments <$250; Small payments related to state or agency contracts MUST have the contract number entered in the line item text. The ten digit contract number must be the leading text in the line item text field (not header text). The Procurement requirements must not be artificially divided by governmental bodies so as to constitute a small purchase pursuant to this section.(section of SC Consolidated Procurement Code) Late invoices after FYE cut-off (If applicable, the contract number must be included in line item text) Payments made through the State Fleet Management Commercial Vehicle Repair Program (CVRP) Process for Direct Payment: Vendors should send invoices to Internal Operations. Invoices received in the division should be scanned and ed to the Accounts Payable team at accountspayable@io.sc.gov with the appropriate account assignment information. Revised January 29, 2015 Page 18

19 There are exceptions to the process where invoices are keyed in specific Board divisions, where specific Board programs are involved. The invoice should indicate the following: 1. Vendor name 2. Vendor Address 3. Invoice number (some smaller vendors may not assign a number) 4. Invoice date (some smaller vendors may not include this data) 5. Due Date for receipt of payment 6. Dates of Service 7. Description of Goods/Services provided 8. Amount of Goods/Services 9. Amounts charged for tax and/or shipping, if applicable 10. Invoice total The division must provide the following information for direct payments: 11. Account assignment information a. Cost Center b. Fund c. Functional Area d. Grant (if applicable) e. WBS (if applicable) f. Internal Order (if applicable) 12. Approval signature(s)-as designated Internal Operations will determine the general ledger account (classification of the expenditure). Assistance from the division may be requested to clarify any issues. If additional data is required, such as approvals or account assignment data, Internal Operations will notify the appropriate Board division. Employee reimbursement In rare instances, an employee may need to be reimbursed for an allowable purchase. Employee reimbursement is processed as a direct payment. To reimburse an individual for allowable purchases, the employee should prepare an including the employee name, address, employee vendor number, the total amount to be reimbursed. The employee should attach the imaged receipts to the and the should be sent to the supervisor for approval. Once reviewed and approved by the supervisor, the supervisor should forward the and attachments to the budget/fiscal liaison for account assignment and then the documents should be ed (forwarded so attachments remain intact) to Internal Operations at accountspayable@io.sc.gov for processing. If the employee does not have access to , a memo with the information defined above and signed by the employee and supervisor with the receipts attached should be forwarded to the budget/fiscal liaison for appropriate account assignment. Then the documents should be scanned and sent to Internal Operations at accountspayable@io.sc.gov for processing. The paper documents can be sent by Interagency Mail. Please do not and paper mail the package (avoid duplicates) Payment relating to a Purchase Order A payment relating to a purchase order is used to remit a payment to a vendor for goods or services where the procurement was initiated through a purchase order (PO). The PO encumbers funds and the payment is used to release the encumbrance and remit payment to the vendor. Vendors should reference the PO number on the invoice. Revised January 29, 2015 Page 19

20 Process for payments related to a purchase order: Vendors should send invoices to Internal Operations. Invoices received by the division should be scanned and ed to the Accounts Payable team at accountspayable@io.sc.gov for processing. There are exceptions to the process where invoices are keyed in specific Board divisions where specific Board programs are involved. The invoice should indicate the following: 1. Vendor name 2. Vendor Address 3. Purchase Order Number 4. Invoice number (some smaller vendors may not assign a number) 5. Invoice date (some smaller vendors may not include this data) 6. Due Date for receipt of payment 7. Dates of Service 8. Description of Goods/Services provided 9. Amount of Goods/Services 10. Amounts charged for tax and/or shipping, if applicable 11. Invoice total Internal Operations will verify the general ledger account defaulted from the Shopping Cart NIGP code. Assistance from the division may be requested to clarify any issues. A payment relating to a purchase order does not require the approvals outlined earlier. These approvals were required when the purchase order was established. Approval for payment relating to a purchase order is dependent on the type of purchase order. If the purchase order requires a goods receipt, the invoice does not require an approval. The goods receipt serves as the approval. If the purchase order does not require a goods receipt, approval requirements are dependent on the type of purchase. An approval is required when the purchase is for items such as hours worked by a contractor or software purchases. An approval is not required for repetitive monthly services like a copier service or cellular telephone service. Internal Operations will contact divisions for approvals when they are required and not included with the supporting document. Revised January 29, 2015 Page 20

21 Interdepartmental Transfers (IDTs)-Payables An IDT payable is a finance document used to process payments for items/services received from or provided by state agencies. To process an IDT, the division will review unpaid documents by customer number in the financial system. The document should include an image of the invoice presented by the billing agency for payment. Internal Operations also routinely reviews the Z_IDT_DOCLIST and notifies divisions of open documents. Approval: IDTs must be approved before payment is remitted to the billing agency. Approvals are provided by one of the following methods: 1. An with details identifying the IDT document number and amount; 2. An electronic post-it note on the image or attachment to the image; items may be attached to the image by scanning the item in On-Base and attaching it to the document by late attachment 3. Directed by Executive Management (account assignment data will be determined by Internal Operations) 4. A signature on the image before it is sent for processing or scanned. Procedures: The division will determine the account assignment data. The division will notify Internal Operations when an IDT is approved for payment by sending the respective document number to the accounts payable team at accountspayable@io.sc.gov. The account assignment data will be attached to the image in the financial system or included in the notification to the accounts payable team. If the division does not identify the expenditure classification, Internal Operations will evaluate the description on the invoice to determine the general ledger account. Assistance from the division may be requested to clarify any issues. Goods Receipt or Invoice Mismatch Report SCEIS provides a report which displays mismatches in the 2-way or 3-way match of the Purchase Order (PO), Goods Receipt (GR) (if required) and Invoice quantities and amounts. The report verifies that the GR and Invoice quantity and amounts do not exceed the PO. Divisions will be notified by Internal Operations if there are items requiring action to resolve. Revised January 29, 2015 Page 21

22 Disbursement of Checks Purpose: To establish procedures for disbursement of checks (non-payroll). Procedures: A. The Internal Operations' courier picks up all checks (other than payroll) from the State Treasurer's Office daily and delivers to Internal Operations. B. Internal Operations distributes the checks. Checks are mailed to the payee by Internal Operations unless the requirements below are applicable. In the case where checks will be routinely returned to the division rather than mailed, a written request must be made to Internal Operations stating the reason for the checks to be returned. A new request must be sent at the beginning of each fiscal year and updates should be submitted when changes occur. Checks to be returned to the division or signed for by a vendor on a non-routine basis must be requested via "Request for Return of Checks" Form and forwarded to Internal Operations by to accountspayable@io.sc.gov or in paper form by Interagency Mail Service or hand delivery. To encourage faster delivery, please use the process when possible. The form is found at Revised January 29, 2015 Page 22

23 Lease Agreements and Service Contracts Purpose: To establish a procedure for any Division of the Budget and Control Board obligated by lease, lease/purchase or installment purchase agreements to properly account for and report those agreements. Procedures: Forward a copy of all contracts for new leases, current leases, lease/purchases, and installment purchase agreements and all correspondence dealing with changes to current leases, lease/purchases, and installment purchase agreements to: Budget & Control Board Internal Operations General Ledger Capitol Center 1201 Main Street, Suite 400 Columbia, SC Revised January 29, 2015 Page 23

24 Capital Assets and Inventoried Assets Purpose: To establish a procedure for Divisions of the Budget and Control Board to control and account for capital and inventoried assets. Establishes procedures for capital assets, inventoried assets and IT related assets. Procedures: A. Capitalization Policy - Any unit of property, with the exception of computer software and real estate, having a useful life of two years or greater and having an acquisition cost greater than or equal to $5,000 will be capitalized on the capital asset system. - All items which cost more than $1,000 and less than $5,000 will continue to be inventoried by the Capital Asset Section and will be addressed in these same procedures. - Buildings, depreciable land improvements and software exceeding $100,000 will be capitalized. All costs associated with land will be capitalized. - Amounts greater than or equal to $5,000 spent in restoring capital assets or costs of repairs which appreciably prolong the life of the property will be treated as capital expenditures and be captured in the capital asset system. - Expenditures for items greater than or equal to $5,000 and not specifically addressed in the procedures will be handled on a case-by-case basis. B. Management of Assets - Management must emphasize to employees that they are responsible for the security and safeguarding of assets in their Divisions. Appropriate controls must be in place to safeguard assets. Examples include locking doors to the areas at night (not individual offices) and keeping assets such as laptops or video equipment under lock and key. When there is employee turnover within a Division, all capitalized and inventoried assets issued to the employee must be accounted for immediately (upon notification of the change). When laptops or other IT related assets are issued to individuals or to a particular program area, the capital asset liaison must verify existence and the asset identification number for each laptop/tablet or other IT related item on a monthly basis. Further, a periodic check/verification should be made for any and all assets assigned to an individual not held on the premises. The asset liaison will confirm existence annually at a minimum and maintain documentation of this confirmation. C. Determination of Amount to be capitalized or inventoried- Acquisition costs will be defined as all costs associated with procuring a unit of equipment and placing it on site, in operation, to include at a minimum: - Invoice cost - Sales and use tax - Inbound freight costs - Transportation costs other than freight - Site preparation - Professional and legal fees directly attributable to unit acquisition - Installation Revised January 29, 2015 Page 24

25 Note: In those cases where original purchase documents are not reasonably available and an inordinate expenditure of resources would be required to establish the original cost of a unit, a reasonable estimate of the cost will be made by e of Internal Operations-Capital Assets on the basis of such documentary evidence as may be available. D. Expensing equipment less than or equal to $1,000 - Items with an acquisition cost less than or equal to $1,000 will not be included on the Board s capital asset accounting system since they are below the tracking limit and must be charged a supply (503XX) expenditure object code. There is no requirement for Divisions to maintain lists of these items unless they are IT related. Board IT will develop a master listing of all IT related assets. - Divisions must develop their own procedures for maintaining control over those assets that are particularly at risk or vulnerable to loss such as audio and video equipment, laptop/notebook computers, and office equipment. Note: Although there is no requirement to maintain a list of assets below the controlling limit, the Division Director, at his/her discretion may do so. Internal Operations-Capital Assets maintains a supply of red, unnumbered stickers that Divisions may use to identify those assets, but the use of a red decal is not mandatory. Divisions may, at their discretion, elect to use any other means to identify and account for those assets below the controlling limit. E. Identification of Budget and Control Board Capital Assets F. Acquisition of Assets - Most capital assets accounted for on the Budget and Control Board capital asset system will be identified by the use of a silver decal with wording South Carolina State Budget and Control Board and a five (5) digit property inventory number. In some cases where stickers are not feasible, an engraving tool may be used. Note: Office of Internal Operations-Capital Assets must be notified of all equipment purchased for resale. Preferably, notification will be by memorandum and by a note on the Shopping Cart/Purchase Order. Equipment purchased for resale will not go on the capital asset system and must be charged to the appropriate 5033XX expenditure object code. - Items with an acquisition cost greater than or equal to $5,000 must be coded with ASSET UNKNOWN on the shopping cart to workflow to the Asset Accountant for the issuance of the decal deemed as a capitalized item. Items greater than $1,000 but less than $5,000 must also be coded with ASSET UNKNOWN on the shopping cart to workflow to the Asset Accountant for the issuance of a decal deemed as a low value asset. All software and software programming over $100,000 must be coded with ASSET UNKNOWN on the shopping cart to workflow to the Asset Accountant for the issuance of a decal. Software less than or equal to $100,000 may be charged to the appropriate cost center, fund and functional area with a supply object code (503XX.) - It is now required that internally generated computer software with a cost in excess of $100,000 is capitalized. Computer software should be considered internally generated if it is developed in house by the State s personnel or by a third party contractor on behalf of the State. Commercially available software that is purchased or licensed by the State government and modified using more than minimal incremental effort before being put into operation also should be considered internally generated. Please notify Internal Operations should you have instances which meet these requirements and the appropriate costs will be capitalized. Revised January 29, 2015 Page 25

26 - Items which individually cost above $1,000 will be automatically placed on the capital asset system as low value assets. Items which cost greater than or equal to $5,000 will be capitalized. Software exceeding $100,000 will be capitalized and software less than or equal to $100,000 will be expensed. - All shopping carts coded as ASSET UNKNOWN workflow to the Asset Accountant for review and assignment of asset numbers. If there are items of equipment to be capitalized or inventoried, Internal Operations-Capital Assets will prepare one Internal Operations Capital Asset entry form for each unit of equipment to be capitalized or inventoried and assign a decal number. Internal Operations-Capital Assets will then attach the decal to the Capital Asset entry form and forward it along with a copy of the shopping cart to the Division. The Capital Asset Addition form is located at Capital Asset entry forms and decals must be held until the equipment arrives. The individual in the Division designated as the Capital Asset liaison must affix the decal to the proper unit of equipment, complete the required fields on the Capital Asset entry form, and return the Capital Asset entry form to Internal Operations-Capital Assets. G. Changes to Assets Applicable to equipment of the Budget and Control Board marked with a silver property decal. This includes changes to room number, building name, serial number, license tag number, etc. Notify Internal Operations-Capital Assets by of the change. Include decal number and new property information. - Notify OIO-Capital Assets if your section is moving i.e., changing physical locations. An inventory must be conducted prior to the move and immediately after the move to ensure all the equipment is accounted for and locations are changed reflecting the new location. OIO- Capital Assets will allow Divisions to write in new locations on the most current asset printout. Please coordinate this with Internal Operations-Capital Assets. H. Transfers of Assets Applicable to equipment of the Budget and Control Board marked with a silver property decal. - Transfer occurs when a unit of equipment is transferred from one section to another within the Board. If the asset leaves the Board totally, it is an intra-agency transfer or a disposal if transferred to a non-state entity. - Complete the Internal Operations Capital Asset Transfer Form available from Internal Operations-Capital Assets. The Division transferring equipment out will complete the FROM information. The Division receiving the equipment will complete the TO information. The Capital Asset Transfer form is located at: - Both the designated Capital Asset liaisons in the sending section and the receiving section must sign the form. - Send completed form to Internal Operations-Capital Assets. I. Disposals of Assets Applicable to equipment of the Budget and Control Board marked with a silver property decal. Revised January 29, 2015 Page 26