Purchasing 101 Medical School Administration

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Medical School Administration

January 2012


Purchasing Policy website……………………………..3

Considerations for all types of Purchasing……………3

Procurement Card…………………………………….5


Non Purchase Order (Non-PO Payments)……………15

Non-Travel Related Expense Reimbursements……….16


Traveling on University Business………………………21

Additions to the Dean’s Office Travel Policy………….25

Appendix A: Standard vs. Professional Services……..26

Appendix B: CPS Paperwork Reference Grid………..27

Approvers in Medical School Administration…………..28

Policy Links & Contact Info…………………………….29

Purchasing at the University


Policy Post - Provides current updates on University policy information http://policy.umn.edu/User/POLICYLIB_POLICYPOST.html

Considerations for all types of purchasing at the University

Code of Ethics

  • Anyone who purchases or initiates a purchase is required to read and sign the Code of Ethics document and submit to Medical School Administration finance office on an annual basis.

  • Key points on the document

    • Maintaining knowledge of purchasing policies

    • Receive no financial or personal benefit from vendor

    • Conduct business that is fair to the vendor while striving to obtain the best value and give opportunities to targeted business as defined by the University

All purchases

  • All purchase’s justification must include the 5 Ws (who, what, when, where, and why-benefit to the University.)

    • Example: Jane Does used Dynamex on 11/18/11 to deliver teaching materials to Yr 2 instructors located off campus. Timely delivery is essential to insure instructors are well prepared prior to teaching class.

  • Sales Tax http://tax.umn.edu/sales_tax.html

    • The University of Minnesota can purchase many items exempt from state and local sales taxes. In the state of Minnesota, this exemption does not apply to lodging, airfare, prepared food, candy, soft drinks, motor vehicles, waste disposal services, or construction materials purchased by a contractor.

    • Tax exemption only applies to the University, not to the individual making the purchase. If an employee is paying with personal funds, they must pay the sales tax. Making illegal use of the University’s sales tax exemption puts the individual paying the expenses at risk for being fined $100/transaction.

    • Employees and non-employees may be eligible to receive sales tax when seeking personal reimbursement for out of pocket expenses. Generally, if the purchase is not approved, the tax will not be approved either; and if the purchase and method of purchase are approved, the tax will be reimbursed. If, however, the Department deems that the purchase was appropriate but could have been done using an approved method of purchasing, such as a PCard, PO, Non-PO, sales tax does not need to be reimbursed.

  • Original itemized receipts (see Travel section for exceptions)

    • Taped to one side of paper. Be careful not to tape over text (adhesive makes print fade and will not be captured in imaging.)

    • Submit “Statement in Lieu of Receipt” (UM 1566 in Forms Library) if missing a receipt – Should be a rarity.

    • On all forms submitted for payment, preparer must be aware of information such as ssn, credit card information and HIPPPA data that must be blocked out of receipts and backup documentation.

    • All bar codes must be blocked out on receipts, invoices, and backup documentation.

  • Reimbursement of expenses that are going to be paid by a third-party, should not be submitted to the University. The other institution or organization should be reimbursing the purchaser directly.

  • Any purchases that are unallowable by University policy will have to be reimbursed by the purchaser to the University.

  • It is a departmental supervisors’ responsibility to notify the Medical School Administration finance group of terminations and hires as this will ensure compliance with University policies.

  • Ensure that the correct chartstring is used for each purchase

    • Use all fields including CF1 and CF2

    • Only use emplid if part of your chartstring – only 2 in Dean’s office

Procurement Card (PCard)
The University’s preferred method of purchasing is with a Procurement Card (PCard). A PCard is a University charge card issued to approved employees which directly charges an EFS chart string.
The procurement card does not replace the use of purchase orders. Purchases should be made in accordance with Appendices: “Examples of Allowable and Unallowable Purchases” and “Blocked Vendor Types” of the “Using the University Procurement Card” policy and Appendix: “Non Purchase Order Related Payments” of the “Purchasing Goods and Services” policy (web links available at the end of this section).
Examples of allowable purchases:

  • Airfare

  • Books and publications

  • Car rental

  • Catering charges, excluding alcohol

  • Computer equipment

  • Conference registration fees

  • Copiers, leases, supplies

  • Copying services

  • Dues, memberships and subscriptions

  • Hospitality, excluding alcohol

  • Lab charges

  • Mailers, shipping, courier companies

  • Non-travel supply items, conference supplies, books, etc.

  • Office supplies/materials

  • Office water coolers

  • Oxygen, gases

  • Scientific supplies

  • Telephone services, pagers, or department cell phones

Do NOT use the card for:

  • Alcohol

  • Capital equipment

  • Cash advances

  • Consultants or professional services

  • Lodging expenses

  • Travel meals

  • Radioactive materials

  • Research animals

  • Personal expenses of any kind

  • Any item not allowed by cardholder department policies or procedures.

  • Any item not allowed by sponsoring agency

Cardholder: responsible for all transactions and use of the PCard is restricted to the person whose name is embossed on it. If the PCard is used by someone other than the cardholder then he/she risks having the PCard revoked. The cardholder is also responsible for taping receipts, providing complete expense justification, providing accurate chart string information, promptly submitting documentation to reconciler after each monthly billing cycle has closed, and obtaining appropriate signatures on the Procurement Card Purchase Detail Report prepared by the reconciler.

Reconciler: responsible for reconciling PCard charges in EFS (Enterprise Financial System) on a monthly basis. This also includes proper assembly of all documentation, verifying chart strings and correct account codes prior to entry in EFS, producing a Procurement Card Purchase Detail Report for each cardholder, verifying signatures, and submitting the report to the approver. The reconciler ensures purchases are consistent with department and University policies and procedures. The cardholder may be the reconciler.
Approver: responsible for reviewing and approving PCard charges, both on paper and in EFS, on a monthly basis. Also returns (denies) charges to the reconciler due to incorrect chart string, insufficient justification, etc. The approver also ensures purchases are consistent with department and University policies and procedures and that they are accurate and properly accounted for.
Certified Approver: a department or collegiate staff person who has been given authority by the Vice President for Research to review and approve financial transactions involving sponsored funds.
Department Card Administrator (DCA): responsible for developing departmental PCard procedures, provides assistance within the department, and may be the approver. Acts as a liaison between Central Program Administrator and the cardholder, e.g. receives and distributes cards; sends email notification of employee name/address changes, card cancelations, or lost/stolen cards; ensures that the Purchase Detail Report (PDR) and supporting documentation are imaged; serves as the primary contact for communications from the central PCard office regarding missing PDRs, audit compliance memos, etc.
PCard Guidelines and Reminders:

  • There is a University per purchase maximum of $2499.99 and the monthly credit limit per card is $10,000.

  • An equipment expense of $2,500 or more is considered a capital purchase and ineligible for payment using a PCard.

  • If a non-equipment expense will exceed the $2,499.99 maximum then special permission may be granted for a one time purchase. The cardholder must email the approver requesting a credit extension for that purchase which includes total cost and complete justification.

  • If sales tax is charged in error it is the cardholder’s responsibility to contact the vendor and initiate a credit for the amount overpaid.

  • If a charge has been assessed in error, there is a 60-day limitation from the date of purchase to dispute a charge using the “Procurement Card Transaction Dispute/Resolution Form (UM 1658 in Forms Library) available at: http://policy.umn.edu/prod/groups/president/@pub/@forms/@procurement/documents/form/dispute_res.doc

  • Ideally the cardholder will submit original itemized receipts and applicable backup documentation as purchases are made throughout each month.

  • Ensure the correct signatures are obtained on the PDR. If the cardholder is not the budgetary approver then the budgetary approver’s signature is required.

  • Is the PCard purchase travel related? Only airfare and event registration can be charged.

For more detailed information please see the following administrative policies and their appendices:
Policy: “Using the University Procurement Card”

Appendix: “Examples of Allowable and Unallowable Purchases”

Appendix: “Blocked Vendor Types”


Policy: “Purchasing Goods and Services”

Appendix: “Non Purchase Order Related Payments”

Training required for Preparers:

  • Basic Accounting (#1 pre-requisite)

  • Chart of Accounts (#2 pre-requisite)

  • PCard Reconciliation

Training required for Approvers:

  • Basic Accounting (#1 pre-requisite)

  • Basic Accounting II (#2 pre-requisite)

  • Chart of Accounts (#3 pre-requisite)

  • PCard Approvals

Training Services website:



Requisitions are used to enter a variety of purchasing requests in EFS: standard goods and services, U-wide contracts, UStores orders, blanket orders, contracts for professional services, and capital asset purchases. Once a requisition has been entered and approved it is sourced to, i.e. becomes, a purchase order (PO).

In EFS, the four basic methods for adding goods and services to a requisition are as follows:

  1. The Web tab is used to order directly from U-Stores, Apple, or Dell. Note: all computer ordering for the Medical School should be done through AHC-IS.

  2. The Special Request tab is used to key in goods or standard services not available through the Web tab. These include standard goods and services purchased from a U-wide or State of Minnesota contract, capital assets, or other non-U-Wide Contract vendors.

  3. The Blanket Order tab is used to create a blanket order. Blanket orders are contracts with vendors to supply identified goods and standard services at an agreed-upon price, up to an agreed-upon total dollar amount, and across an agreed-upon amount of time (not longer than one fiscal year). Note: this tab cannot be used to purchase capital assets.

  4. The CPS tab is used to create a requisition to purchase professional or consulting services.

Vendor Selection

Prior to starting a new requisition, the vendor must be determined, except in the case of a requisition that requires bidding. It is the responsibility of the preparer to verify that the vendor information is set up in the financial system and is valid. If the vendor is not valid (“approved” and “open for ordering”), the preparer must go through the new vendor authorization or change an existing vendor process. (If the vendor isn’t valid a sourcing error will occur in EFS.)

Vendor Selection prioritization:

  1. U of M Auxiliary or Internal Sales Vendors

  2. U-Wide Contract Vendors

  3. State of Minnesota Contracts

  4. Non U-Wide or State of Minnesota Contract Vendor

Procurement Process

The following diagram illustrates the procurement process for standard goods and services:


All goods must be physically received by the department/casual receiver in accordance with the Purchasing Goods and Services policy and the Receiving Purchases administrative procedure.

  • Non-assets: The department/casual receiver physically receives AND records in the financial system the receipt of non-capital equipment items or supply items (non-assets).

  • Assets: The department/casual receiver physically receives capital equipment assets. During the physical receiving process, the department/casual receiver collects physical information (model, serial number, etc.) on each asset present. The information is recorded on a Request to Procurement Specialist form (UM 1681 in Forms Library), which is then submitted to the assigned procurement specialist who in turn receives the asset in EFS.

  • The administrative procedure “Receiving Purchases” can be viewed at: http://www.policy.umn.edu/Policies/Finance/Procurement/PURCHASING_PROC03.html

Purchasing Professional Services (SEE APPENDIX A)

Professional services are defined as customized services consisting of specialized intellectual or creative expertise based on personal skills or ideas of an individual(s) that are provided for a fee, which may be determined individually with each customer for each service contract.

Contracts with professional services providers must:

  • be fully and formally approved consistent with the president’s delegation of authority before work begins if applicable to contract type (see Appendix B, “CPS Paperwork Reference Grid”)

  • comply with Internal Revenue Service (IRS) requirements for defining employees and independent contractors;

  • comply with special requirements of projects supported by sponsored funds;

  • include a complete statement of work including any deliverables;

  • use either the University’s standard Contract for Professional Services (CPS) with no alterations, additions, or omissions, or use a contract that has been reviewed and approved by the Office of the General Counsel;

  • not conflict with other University policies.


  • For purchases $50,000 and over, e.g. executive searches, a competitive bidding process must be used to select a service provider;

  • For purchases under $50,000, the department may request that Purchasing Services conduct a bidding process or the department may document some other credible basis for contractor selection, basis for price, and assurance that price is reasonable.

There are four different types of requisitions that can be created using the CPS tab in EFS:

  • VCPS – Voucher Contract for Professional Services

  • QCPS – Quick Contract for Professional Services

  • CPS – Contract for Professional Services

  • PCPS – Performance Contract for Professional Services

Paperwork Requirements:
Statement of Work (Form UM 1697 in Forms Library)


  • States contractor’s name

  • States scope of work

  • States payment schedule

  • Required for all CPS requisition types

Professional Services Information Sheet (PSIS) (Form UM 1669 in Forms Library)


  • Section 1 (Basis for Vendor Selection and Price Reasonableness) is required for all professional services requisitions $3,000 and over.

  • Section 2 (Current Employer/Employee Relationship) is required for individuals and sole proprietors.

  • Section 3 (Types of Services Provided) is required for individuals and sole proprietors.

  • Section 4 (Data Collection Sheet) is required for sponsored funds and optional for non-sponsored funds.

Performance Agreement


  • Required for any PCPS requisition

  • Lists details of performer’s event

  • Lists University’s standard terms and conditions specific to performers

  • An external document located via the Purchasing Services website:


CPS Paperwork Reference Grid (SEE APPENDIX B)

Honorariums: Contract or Check Request?

When an individual is receiving an honorarium less than $600.00 within one calendar year, the payment is made using a Check Request Form (CRF) and there is no need to set the individual up as a vendor in EFS.

When an individual is receiving an honorarium of $600.00 or more within one calendar year, the payment is made using a contract and the individual must be set up as a vendor in EFS.
When there is a combined payment of an honorarium and travel expense reimbursement, it is still the amount of the honorarium that will determine which process to use for payment. For example, a visiting scholar is receiving a $300.00 honorarium and $457.00 travel reimbursement. Even though the total payment will be $757.00, it can be paid using a CRF without vendor set up since the honorarium portion is under $600.00. Make sure to split the distribution and use the appropriate account codes to differentiate the honorarium portion from the expense reimbursement.
Use of account code 720399, “Other General Services,” for paying an honorarium should be a rarity. An example of this type of “general” service is paying a student $100 for providing a tour of the department.

Professional Services Procurement Process

  • The procurement process for Quick Contracts for Professional Services (QCPS) follows the same flow as the procurement process for standard goods and services.

  • The procurement processes for Voucher Contracts for Professional Services (VCPS), Performer Contracts for Professional Services (PCPS), and Contracts for Professional Services (CPS) vary slightly.

VCPS Procurement Process

Although the financial system automatically creates the voucher for paying a VCPS, the documentation still needs to be imaged for auditing purposes. “VCPS – For Imaging Only” ought to be written at the top of the invoice and/or backup documentation and submitted to the cluster for imaging.
PCPS and CPS Procurement Process

Note: the shaded boxes indicate steps for which the requisition preparer is responsible. However, receiving by the requisition preparer is conditional per departmental responsibilities.

CPS Amendments

A CPS amendment is a change to the contract initiated by the requisition preparer from the Manage Requisitions page in EFS. These changes require the online approval process and, depending on the change request, additional approvers may be included who were not original approvers.

  • Internal change: change in chart string, justification; entered by Procurement Specialist

  • External change: change in dollar amount, start and end dates, scope of work; completed via CPS Amendment process in EFS

Requisition/Purchase Order Guidelines and Reminders:

  • For standard goods and services, a requisition is to be used if the vendor does not accept credit cards or the purchase goes against P-card policy.

  • Requisitions totaling $100 or less are automatically approved in EFS

  • Allow sufficient time for requisition process before initiating services, especially when purchasing professional or consulting services.

  • Use account code 168001 for equipment acquisitions of $2,500 or more.

  • Use account code 168002 for other acquisitions (capital assets other than equipment) of $2,500 or more.

  • Chart of Accounts manual (05/25/11 rev) is available at: http://www1.umn.edu/ohr/prod/groups/ohr/@pub/@ohr/@trainingservices/documents/asset/ohr_asset_342284.pdf


For more detailed information please see the following:
Administrative procedure, “Purchasing Goods and Services”

Administrative policy, “Purchasing a Professional Service”

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