4.0 goods & services 4.1 Budgetary control No expenditure may be incurred unless it is matched by uncommitted approved budget provision. Requisitions and orders can only be raised following the prior written approval of the relevant budget holder in accordance with the authorisation procedure outlined elsewhere within these financial procedures. 4.2 Ordering system purchase requisitions Wherever practicable, purchases of goods and services must be initiated by the issue of an official purchase requisition form, either using the pre-printed paper form or the e-requisition functionality within E-financials (E-requisitions are for orders up to 5,000 only). The pre-printed forms shall be securely retained within the finance department and only issued to authorised members of staff as required. The latter shall ensure that any such forms in their custody are also kept in a secure place. The Purchase Ledger Supervisor/Ledger Administrator(s) shall keep a register in which details of purchase requisitions issued are recorded. Paper purchase requisition forms will be pre-numbered and in duplicate. Following completion of paper form, the original will be sent to the finance department and a copy retained by the originator. Where the requisition is generated electronically a unique reference is generated by E-financials, prefix R, the originator and approver are recorded electronically. Approval is set up in E-financials in accordance with section 11. Approved requisitions are reviewed daily by the Procurement Officer, queries are returned to the originator. The Procurement Officer converts the requisitions to a purchase order, the order is approved in the Purchase Order Processing module by the Ledger Administrators. The following details are required: quantities prices, including any discounts (net of VAT) total VAT due on order delivery dates and addresses a full description of the goods or services the full name and address of the supplier Supplier code cost centre, account and activity to which expenditure is to be charged All paper purchase requisitions must be signed by the originator of the form and be countersigned by an authorised signatory in accordance with the authorisation procedure. Page 1 of 12
Paper Purchase Requisitions with incomplete details will be returned to the originator. The Procurement Officer will review purchase requisitions received to ensure that preferred CPC/OGC suppliers are utilised whenever possible. All new suppliers must be requested using the New Supplier Request Form prior to completing the purchase requisition. 4.3 Ordering system purchase orders Following the review outlined above, details from the paper requisitions shall be entered into the accounting system via the purchase order processing module. Paper requisitions are input by the Ledger Administrator and checked by an additional member of the team, both sign the purchase requisition to evidence the check. Higher value purchase requisitions have to be authorised by the Finance Officer or Deputy Director of Finance or Director of Finance before an official order can be generated, in accordance with the authorisation limits. Official purchase orders, derived from the input of paper purchase requisitions or from receipt of electronic requisition, shall be distributed as follows: electronic or hard copy to supplier copy to the originator for matching to the purchase requisition and for subsequently authorising the purchase invoice via access to a view on Image Now electronic file copy via Image Now for the finance department All hard copy system orders printed for release to suppliers are signed by 2 1 member of finance by either the Procurement Officer, Purchase Ledger Supervisor, Accounts Clerk or Purchase Ledger Clerk to evidence a final review of accuracy. Official purchase orders will normally be raised within 2 working days of the receipt in the finance department of a fully completed, authorised purchase requisition. Purchase order stationery is securely retained in the Finance Department. 4.4 Exceptions In certain circumstances where, for example, operational requirements dictate, the standard purchase ordering system outlined above shall be waived. Illustrative examples include: Recurring perishable supplies such as foodstuffs when the holding of sufficient stock is impracticable given the nature of the goods, turnaround and lead times Emergency repairs to buildings or equipment Page 2 of 12
Urgent health and safety works Other urgently required sundry items Items purchased via the internet (non-purchasing card) Where these exceptions are deemed to apply, a purchase requisition must still be raised and authorised before a commitment is made to incur expenditure. The actual commitment can be made e.g. verbally or by faxing the purchase requisition. The purchase requisition should be passed to the finance department as soon as possible after the verbal or fax commitment has been made. In these circumstances the purchase requisition must be passed to the finance department clearly marked Confirmation only. In addition to the above, Company Barclaycard and the petty cash system is available to support the purchase of low value goods required on an ad hoc basis and should be used wherever possible. Services agreed under contract which have been competitively tendered, such as utilities, insurance, and audit shall be exempt from the purchase requisitioning and ordering system. Other fixed costs such as licences, exam fees, major service contracts, masterplan contractor costs and central purchase contracts (e.g Lyreco) may also be exempt from the requisitioning and ordering system, however, this list is not exhaustive and liaison with the Finance Department to agree any additions to this list is essential prior to commitment with suppliers. The College requires that all purchases of cash equivalent vouchers (eg vouchers for high street shops, chains of shops, the Mall in Blackburn etc) are purchased via a purchase requisition and purchase order which is submitted to the finance department and processed as described above. Vouchers will be delivered to the finance department and distributed to the person raising the purchase requisition for distribution to students. It is the responsibility of this person (usually a resource manager) to account for these vouchers. It is expected that resource managers will not hold a stock of vouchers, but order as and when required to exact numbers needed. Vouchers for distribution to staff represent a benefit in kind and can only be purchased with the prior approval of the Director of Finance or other member of the Executive team. 4.5 Purchasing policy The College aims to maximise value for money from its procurement processes. Membership of the Crescent Purchasing Consortium (CPC) is an important and evolving element of the College s strategy in this regard. CPC have a continuously increasing number of tendered contracts in place covering a wide range of goods and services and, as a general principle, use of these contracts is advocated wherever possible. The college also has access to Office of Government Commerce (OGC) Page 3 of 12
negotiated contracts. The College s Procurement Officer (located in the Finance department) acts as CPC/OGC liaison officer and is the first point of contact regarding queries in this area. There are a number of key requirements for all members of staff involved purchasing goods and services that assist the College in maximising value for money. Separate College wide arrangements apply to the ordering of stationery and IT consumables. Requests for furniture are referred to the Estates Manager prior to order. Where quotations or tenders are being obtained (in accordance with these Financial procedures) for goods or services covered by CPC s contracts, the relevant CPC suppliers must be invited to bid. Details of the College s preferred suppliers are listed on the staff intranet system. A copy of the CPC supplier list directory is circulated by the Procurement Officer annually to key purchasers across college (e.g. Resource Managers). To assist in securing best value and consistency across the College, orders for Estates related goods and services must be agreed in advance with the Estates Manager (or his nominated representative). This requirement shall cover all manner of buildings adaptations, maintenance and other works and also the purchase of furniture and related items for classrooms / offices etc. Furniture requests should follow the Furniture Procurement Process and use the Furniture Request Form. This requirement shall apply irrespective of which particular delegated budget or project the expenditure is to be charged against. In the event on any uncertainty regarding the application / scope of this requirement, the Estates Manager (or his nominated representative) must be consulted prior to a commitment being made. To assist in securing best value and consistency across the College, orders for IT / Computer equipment must be agreed in advance with the Computer Services Manager (or his nominated representative) following the IT Procurement Process using the IT Equipment Request Form. Purchases must be in accordance with the Laptop and Mobile Device Policy. This requirement shall cover:- o all manner of hardware purchases i.e. all specifications of P.C s (including portable items laptops, notebooks, tablets, mobile Page 4 of 12
phones etc) and associated peripheries (including printers, scanners etc) irrespective of whether or not they are to be networked devices. o the purchase / licensing / support & maintenance arrangements for software packages where such software is to be installed on and operated via the College s network. o all manner of connectivity works e.g. cabling, switches, routing etc irrespective of whether or not this relates to the main College network or an alternative proposed LAN. This requirement shall apply irrespective of which particular delegated budget or project the expenditure is to be charged against. In the event on any uncertainty regarding the application / scope of this requirement, the Computer Services Manager (or his nominated representative) must be consulted prior to a commitment being made. 4.6 Company Barclaycard Introduction Company Barclaycard Purchasing is a Government Purchasing Card VISA charge card system which helps the College simplify low value, high volume procurement processes and support staff travelling on College business. This procedure outlines processes to be followed by internal users issued with Company Barclaycards. The Deputy Director of Finance / Finance Officer (FO) shall overview the process in conjunction with the Executive. Cardholders Cards should be requested via the Credit Card Request Form (CCR1) and approved by the Executive (this includes approval of both monthly limits and transaction limits). All cards and PIN notifications are addressed to the Finance Department and show the cardholders name. Upon receipt of the card by Finance the cardholder is contacted to sign the card. Signed cards are held securely in the Finance Department. Communications containing PIN numbers are passed on, unopened, to the cardholder. The Finance Team do not keep a record of PIN numbers. It is the responsibility of the cardholder to ensure that the card details and PIN are kept separately and in a safe place at all times. It is recommended that these details be stored e.g. on a password protected IT file (e.g. Excel). The card details must not be accessible or divulged to anyone else. The card account must only be used for the bona fide purchase of goods or services Page 5 of 12
for the benefit of Blackburn College and must only be used by the cardholder. The card account cannot be used for the purchase of personal items. The cardholder is responsible for all transactions entered into on their account. On a monthly basis card account purchases must always be authorised by someone at a higher level than the person making the purchase e.g. CCH or E Group member. Failure to comply may be treated as gross misconduct. In the event of loss, theft or if card details are compromised, the cardholder should inform Company Barclaycard immediately by telephone and notify the Deputy Director of Finance / Finance Officer. The Finance Officer will maintain a record of all instances notified and arrange for a replacement card if applicable. On receipt of their card details, each cardholder will complete a card acceptance form. This form is to record receipt of the card details, record agreement to the terms and conditions of use and is confirmation that the cardholder will adhere to these procedures. A copy of the terms and conditions of use will be issued to the cardholder. Specific training will be provided to ensure that the cardholder understands the processes involved for recording purchases and approval. Where cardholders require removal of the card from the Finance Department an Application to Remove Credit Card from Finance Form (ACC1) must be submitted and approved by Executive, providing five days notice. The card must be signed out and back, the Finance Officer will maintain this record. The request must clearly state the duration the card is required and the maximum amount that will be spent, both of which must be kept to a minimum. Misuse of the cards may be treated as gross misconduct and be subject to normal disciplinary procedures. Cards issued in the travel category are only to be used for travel related activities (which includes hosting visitors) and cannot be used for any other purpose without prior agreement from the Executive. Physical verification of cards held in finance is carried out monthly and evidenced as such on the card statement by the Purchase Ledger Supervisor/Finance Officer. Card limits There will be a monthly spend limit and transaction limit set for each cardholder, in all cases limits are set following approval from the Executive. The limits will be set based on expected usage and data available on spend for cardholders with similar roles. As a guide, a Resource Managers limit would be 5,000 per month with a 250 transaction limit. All cards issued for travel will be set with a nil spend limit, and amended when travelling via the ACC1 form process. The cards do not allow for cash withdrawals from ATM machines, with the exception of those issued purely for travel, if approved by the Executive. Page 6 of 12
Any variation is as authorised by the Executive on the Credit Card Limit Increase Request form (CCL1) and actioned by the Finance Officer. Variation requests must be provided with sufficient notice for Executive to approve on a weekly basis. The Finance Officer will retain a log of variations and the email giving approval. Each month a report containing transaction limits and monthly spend limits for each card will be produced by the Finance Officer and included in the monthly reconciliations file for review by the Deputy Director of Finance. These limits will be checked against the variation approvals to ensure that cards are at the approved limits. Using the card As the cards are predominantly for low value items it is intended that the card be used wherever possible to purchase sundry goods and services up to a value of 250 incl VAT. Process The card should be used to minimise the production of low value official orders. Internal Purchase Requisitions (PRs)/College purchase orders should not be raised or sent to the suppliers or Central Finance. Goods/services should be ordered over the phone/ internet and paid for directly using the card. Exceptions to the above: If Central Finance are making the payment on behalf of a budget-holder OR if a cardholder is making a payment above their authorisation limit a Purchase Requisition will be required. This is to evidence the appropriate level of budget approval, it is for internal records only and it will not be issued to the Supplier. For clarity, these PR s should be marked clearly Paid by credit card. All cardholders within curriculum and service areas must maintain a spreadsheet record of transactions made using their card. When placing an order the cardholder must ensure that the purchase is within the card s transaction limit (including VAT and carriage charges) and that their monthly limit has not been reached. The cardholder must also confirm whether the supplier is electronic VAT capable. If they are, they need not submit a VAT invoice - HM Customs and Excise accept purchasing card VAT reports as evidence for reclaiming VAT (for transactions up to the value of 5,000). Instead, for reconciliation / audit purposes, the supplier will be asked to forward to the cardholder a priced delivery note or itemised receipt (marked Paid by VISA ). Where a supplier is not able to transmit electronic VAT data the cardholder must ensure that a traditional paper VAT invoice is received (marked Paid by VISA ), as Page 7 of 12
this will be required for legal evidence. It is essential that any invoice/receipts are not authorised for payment via other payment methods e.g. Petty Cash or Purchase Ledger The cardholder is responsible for ensuring that all relevant VAT documentation is received from suppliers used. All documents should be held securely by the cardholder in accordance with 5.5 financial regulations as prime documents. On receipt of the invoice / paperwork the cardholder will check that all the details are correct (i.e. items, quantity, price). If any discrepancy is found the supplier should be contacted to request a refund and VAT credit note. Transaction logs Each cardholder will maintain a spreadsheet log outlining all transactions made. The spreadsheet must be as issued by Finance (named the Purchasing Card Payment Record) must be completed fully with the following details: Cardholder name and statement month Log No (sequential) Cost centre/account code/activity code Date Processed Supplier Used Purchase requisition (PR Ref) number (if applicable see above) Brief description of goods or services purchased Value (net, vat & gross) Confirmation status e.g. Goods received/invoice receipt received Month Transaction cleared on Statement e.g. Nov-02 Comments Note (as required) Purchase Ledger Account Reference should be included in the comments section if applicable this applies to Central Finance only, by exception, where fast payment is required. Review and postings Company Barclay card statements will be issued to cardholders on a monthly basis. Transaction logs will be reconciled to individual cardholder statements received from Company Barclaycard on a monthly basis by the cardholder. This log must then be reviewed and certified. For account holders in curriculum areas this must be carried out by their Curriculum Centre Head. For account holders in service areas this review must be carried out by a Service Area Manager cardholders will be individually advised of these details when their card is issued. Page 8 of 12
This is a fundamental propriety review requiring the signatory to ensure that: - Transaction detail on the cardholder statement agrees to the log and visa versa. All supporting paperwork has been obtained to evidence each transaction. All goods/services have been received for each transaction. The procedure detailed in this document has been applied by the cardholder. The reconciled transaction log (paper copy) plus the cardholder statement should be returned to the Finance Officer / Purchase Ledger Supervisor within 5 working days of issue. The reconciled transaction log requires the signature of both the cardholder and authorised signatory/ manager before it is returned. In addition, an email copy should be forward to the Assistant Accountant following reconciliation and authorisation to facilitate update to the e-financials accounting database. Card Purchases will be posted to the general ledger via a cashbook journal (as part of standard monthly routines). Barclaycard management information The College has access to the following online reports:- - Summary organisation statement - Individual cardholder statement(s) - Evidence for VAT report(s) - Trade category analysis report(s) - Exception report (all transactions value > 100) - Authorisation requests Cardholder statements will be reconciled as outlined above. The Procurement Officer will review expenditure reports to identify opportunities to improve value for money and where a preferred supplier should be in place. A monthly report will be produced for Executive by the Procurement Officer highlighting expenditure levels and identifying trends. Settlement Company Barclaycard purchasing transactions are settled with a single monthly payment collected by direct debit. Page 9 of 12
Retention of Forms The Card Acceptance Form (CCA1), New Cardholder Request Form (CCR1), Application to Remove Card from Finance (ACC1) and Credit Card Limit Increase Request (CCL1) will be retained by Finance for three years. 4.7 Tendering and quotations General In order to demonstrate that the College receives value for money then all staff involved in the ordering and purchasing process will follow the procedure below. This procedure gives limits for when quotations and tenders need to be received. These limits relate to the project or service being undertaken and in no circumstances should there be any attempt to split orders etc. in order to circumvent these limits. Quotations The CLT member responsible should ensure that before orders are placed for goods or services (which are not part of a normal complete periodic competitive tender process - e.g. audit services, security, cleaning etc) where the total estimated cost (inc VAT) is over 10,000, 3 written quotations are obtained. In most cases it is expected that the lowest quotation will be accepted. Where this is not the case the CLT member should evidence the reasons why the lowest quotation was not accepted. Documentation relating to the quotations obtained, and any reasons for not accepting the lowest quotation, should be retained by the area concerned for 3 years. In all cases the Procurement Officer must be involved in purchases over 10,000. The quotes should be reviewed with the relevant member of the Executive Team before a final decision is taken as to which quote to accept. All documentation and quotes should then be forwarded to the Procurement Officer for three year retention. Page 10 of 12
Tendering The CLT member responsible should ensure that before orders are placed for goods or services (which are not part of a normal complete periodic competitive tender process - e.g. audit services, security, cleaning etc) where the total estimated cost (inc VAT) is over 50,000, that a formal tendering process is undertaken. The formal tendering process should include: A written specification of goods or services. The tender is sent out to a number of companies (normally at least 3). That sealed bids are received by a set date. That all bids are opened at the agreed time in the presence of a member of the Executive Team All bids are evaluated and approved in the presence of a member of the Executive Team. Normally the lowest price will be accepted. Where this is not the case the reasons for not accepting the lowest price will be formally noted and kept with the relevant documentation by the Purchasing Officer for at least 3 years. Select lists The Estates Manager shall maintain a select list of the College s approved contractors. Only suppliers included on the select list will be invited to tender for Estates work as appropriate. This shall be updated on an ongoing basis with e.g. details of:- contractors performance in respect of work awarded invitations sent to tender for contracts The select list will be formally reviewed on an annual basis. At all times suppliers should only be selected after reference to CPC/OGC framework agreements. All suppliers will be added to the preferred supplier list on the intranet. Exceptional Circumstances The above quotations / tendering procedures can be waived or amended only in exceptional circumstances having first secured the Principal s written approval. Where the tendering process is waived or amended then the Principal will inform the Policy and Resources Committee of this at the next meeting. 4.8 EU regulations EU procurement regulations apply to written contracts for all forms of procurement or hire throughout the EU for a total value exceeding a certain amount. In order to comply with EU regulations institutions must ensure that the contract is advertised Page 11 of 12
in the Official Journal of the EU (OJEU). The current limits (before VAT) from 1 January 2012 are: Supply and service contracts ( 173,934) Works contracts ( 4,348,350) Any CLT member who may have procurement contracts at levels close to these amounts should contact the Director of Finance before any tendering process begins. Forms relevant to this Section: Name of Form Dept. Owner Latest Version Card Acceptance Form (including terms and Finance May 2012 conditions) (CCA1) Expenditure Log for Cardholders Finance May 2012 New Cardholder Request Form (CCR1) Finance May 2012 Application to Remove Card from Finance Finance May 2012 (ACC1) Credit Card Limit Increase Request (CCL1) Finance May 2012 IT Equipment Request Form Finance October 2012 Furniture Request Form Finance November 2012 New Supplier Request Form Finance September 2012 Best Practice Notes: Name of Best Practice Notes Dept. Owner Latest Version Purchase Order Processing Finance TBC Generating Fixed Asset Job Codes Finance TBC Other Associated Policies, Procedures or Guidance: Name of Document Dept. Owner Latest Version Hints and Tips for Cardholders Finance Nov 2012 Purchasing Card Payment Record (Excel file) Finance May 2012 Laptop and Mobile Device Policy Computer October 2012 Services IT Equipment Procurement Process Finance November 2012 Furniture Procurement Process Finance November 2012 Voucher Guidelines Finance May 2012 Section Owner: Name (Position) Dept. Latest Version Deputy Director of Finance Finance January 2013 Page 12 of 12