Confirming Orders - Procurement Services

Confirming Orders
(After-the-fact orders)
August 2, 2012
Slide 1
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.
August 2, 2012
Slide 2
University and Procurement
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.
August 2, 2012
Slide 3
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.
August 2, 2012
Slide 4
Delegation of Procurement
• The requirements stated herein apply to all purchases of
commodities and contractual services regardless of the funding
• 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.
August 2, 2012
Slide 5
Delegation of Procurement
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.
August 2, 2012
Slide 6
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.”
August 2, 2012
Slide 7
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.
August 2, 2012
Slide 8
Prohibited Procurement Practices
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.
August 2, 2012
Slide 9
Applies to:
• Requisitions
• Expense Reimbursements (especially over $25)
• Payment Request Forms for unencumbered
August 2, 2012
Slide 10
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)
August 2, 2012
Slide 11
Expense Reimbursements
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.
August 2, 2012
Slide 12
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.
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.
August 2, 2012
Slide 13
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.
August 2, 2012
Slide 14
Examples of
Confirming Orders
• Printing or design work submitted after the
work was completed.
• Copies
• Charter buses secured 2 days prior to
• Clothing (i.e. uniforms, shirts, etc.)
• Computer or A/V supplies
August 2, 2012
Slide 15
Adverse Effects of
Confirming Orders
• Vendor assumes risk by providing
• FSU employee assumes risk by
requesting goods/services without having
an established payment method.
August 2, 2012
Slide 16
Adverse Effects of
Confirming Orders
• 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
August 2, 2012
Slide 17
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 (Employee Employer
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
August 2, 2012
Slide 18
Internal University Approvals
Computing Equipment (over $20,000)
Security Systems and Fire Alarms
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
August 2, 2012
Slide 19
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
• Payment Request Form if allowable per the allowable
Unencumbered Disbursements list.
August 2, 2012
Slide 20
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.
August 2, 2012
Slide 21
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
August 2, 2012
Slide 22
How to Prevent Confirming
• 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
• 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.
August 2, 2012
Slide 23
How to Prevent Confirming
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
August 2, 2012
Slide 24
How to Prevent Confirming
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
August 2, 2012
Slide 25
How to Prevent Confirming
Procurement Services Main Phone Number: 644-6850
To apply for a P-Card contact Nancy Milburn at 644-9725 or
P-Card web page:
Confirming Orders: contact Karen Gibson, Associate Director of
Procurement Services, at 644-9729 or
Confirming Order Justification Form and
Reimbursement Justification Form (routes to AP for approval):
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.
August 2, 2012
Slide 26
August 2, 2012
Slide 27

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